Deals & Cases

Abuse of a market-dominant position

Abuse of a market-dominant positionNo charge (insufficient suspicion)

Abuse of a Market-Dominant Position Case | Result of the Fair Trade Commission Investigation, Client Found to Have No Charge

2025.09.17박동일

This is a case in which a company that came under investigation by the Fair Trade Commission on charges of abuse of a market-dominant position obtained a finding of no charge through the strategic assistance of a fair trade specialist attorney.

1. The Client Charged with Abuse of a Market-Dominant Position

Abuse of a market-dominant position charge client circumstances of the case

When a domestic distribution company that came to Daeryun over suspicions of abuse of a market-dominant position came under investigation by the Fair Trade Commission, it requested the assistance of a fair trade specialist attorney out of concern for damage to its reputation and trust.

Circumstances of the Client's Case

The domestic distribution company that came to Daeryun came under investigation by the Fair Trade Commission with respect to the supply of and trading conditions for a particular product line.

The complainant alleged that the client company supplied products preferentially to only some business partners, controlled the distribution volume in particular regions, and restricted the entry of competitors.

In addition, a suspicion was raised that the company had artificially stabilized prices and obstructed competitors' market expansion.

The client was concerned that, if the fact of the commencement of the investigation became known externally, its reputation and the trust of its business partners could be severely damaged.

Accordingly, the client requested the assistance of a fair trade specialist attorney with extensive experience in responding to Fair Trade Commission investigations.

How to respond to the Fair Trade Commission's on-site investigation?
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2. What Is Abuse of a Market-Dominant Position

Article 5 of the Monopoly Regulation and Fair Trade Act prohibits market-dominant enterprisers from engaging in acts that restrict competition.

▶ Principal abusive acts under Article 5 of the Monopoly Regulation and Fair Trade Act

1. Unfairly determining, maintaining, or changing the price of goods or the consideration for services

2. Unfairly adjusting the sale of goods or the provision of services

3. Unfairly obstructing the business activities of another enterpriser

4. Unfairly obstructing the participation of new competing enterprisers

5. Engaging in transactions to unfairly exclude competing enterprisers, or in acts likely to substantially harm the interests of consumers

If an abusive act is confirmed, the Fair Trade Commission may take measures such as a corrective order, the imposition of a penalty surcharge, and publication of the facts.

▷ Corrective order

The Commission may order measures necessary to restore market competition, such as the immediate cessation of the abusive act, the adjustment of unfairly maintained prices, and the publication of the fact of the corrective order.

▷ Penalty surcharge

If an abusive act is confirmed, a penalty surcharge may be imposed within a range of up to 6% of revenue, and where it is difficult to calculate revenue or there is no revenue, up to 2 billion won may be imposed.

From a company's standpoint, unless a response strategy is prepared from the early stage of the investigation, such measures may give rise to both reputational and financial burdens at the same time.

How a Company Should Respond to a Fair Trade Commission Investigation

A company facing a Fair Trade Commission investigation must prepare a systematic response strategy from the early stage.

① Organizing materials: Systematically collecting and analyzing related documents such as contracts, trading conditions, and the distribution structure

② Confirming the facts: Securing objective grounds through interviews with internal personnel and analysis of transaction data

③ Responding to on-site inspections: Clearly explaining matters to investigators' inquiries on the basis of legal and economic grounds

Check out the Fair Trade Commission investigation procedures.
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3. Alleged abuse of a market-dominant position: responding to a Fair Trade Commission investigation

Responding to a Fair Trade Commission investigation into alleged abuse of a market-dominant position

The central issues in this case were as follows.

▷ Whether adjustments to the supply and distribution structure of a particular product constituted an abuse of a market-dominant position
▷ Whether the pricing policy and transaction terms produced anti-competitive effects
▷ Whether the entry of competitors or their participation in the market was unfairly restricted

By closely analyzing the central issues and the characteristics of the industry, the fair trade specialist attorney focused on organizing the materials, reviewing the applicable legal principles, and establishing a response strategy from the earliest stage of the investigation.

Analysis of materials and organization of the facts

ㆍ Comprehensive review of relevant materials, including product supply contracts, the distribution structure, and the pricing policy

ㆍ Collection and analysis of objective data, including regional sales performance and transaction terms

ㆍ Identification of evidence contradicting the complainant's allegations and selection of key materials that could be submitted promptly during the investigation

Legal review reflecting the characteristics of the industry

ㆍ Analysis of the industrial context, including market structure, entry barriers, and supply chain characteristics

ㆍ Legal review and analysis of whether anti-competitive effects existed

ㆍ Preparation of an expert opinion for submission to the Fair Trade Commission to support the company's position

Support in responding to the Fair Trade Commission investigation

ㆍ Clarification of the company's position during the on-site investigation and the submission of written materials

ㆍ Support in responding to the investigators' inquiries with answers grounded in legal and economic reasoning

ㆍ Coordination of priorities for submitting additional materials and preparing opinions, thereby minimizing the burden of the investigation period

4. Outcome of the market-dominant position abuse case: "No charge"

The Fair Trade Commission ultimately closed this case with a finding of no charge (insufficient suspicion).

As a result, the client was able to avoid legal liability without the imposition of a penalty surcharge or a corrective order, and was able to maintain its reputation in the market and the trust of its business partners on a stable basis.

Furthermore, this case provided an occasion to establish an efficient response system and a risk management strategy should similar allegations relating to a market-dominant position arise in the future.

If you are facing a Fair Trade Commission investigation

The need for advisory support in responding to a market-dominant position abuse investigation

If you are facing a Fair Trade Commission investigation concerning abuse of a market-dominant position, a comprehensive review is required that goes beyond a simple verification of the facts to encompass the industry structure, transaction practices, and economic impact.

If a company responds to this process on its own, there is a significant risk that omissions in the materials or errors in the interpretation of legal principles will lead to unnecessary sanctions and reputational loss.

Our firm's 🔗fair trade specialist attorneys combine legal analysis with industry expertise to systematically organize the company's position and to establish a response strategy from the earliest stage of the investigation.

We assist clients with the aim of minimizing corporate risk, efficiently managing every part of the process, including the organization of contract and transaction materials, the securing of key evidence, responses to investigators' inquiries, and the analysis of economic impact.

If you are facing an investigation by the Fair Trade Commission and need a systematic and strategic response, we invite you to request assistance at any time through a 🔗legal consultation appointment.

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This content is based on actual cases handled by Daeryun Law LLC and has been partially adapted. All copyrights belong to Daeryun Law LLC.
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