Fair Trade Commission Investigation Assistance Case | No Charge Concluding the Case for a Client Suspected of Abuse of a Market-Dominant Position

The client in this case was a domestic manufacturing company that had produced and supplied electronic components over a long period.

The client had strengthened its internal certification standards to secure the quality and stability of its products.

In this process, as restrictions arose on the use of certain components, a competitor filed a report, claiming it was a “measure to block market entry.”

At the initial stage, the Fair Trade Commission commenced an investigation, examining both whether the measure was based on technical and safety standards and whether there was a purpose of excluding the competitor.

Judging that a mere technical explanation would not be enough to clarify its intent, the client requested the assistance of a corporate-law specialist attorney with experience in Fair Trade Commission investigations.

The attorney built the argument on the premise that the client company's internal standards were not intended to exclude a particular competitor, but were aimed at securing quality and safety.

In addition, the attorney presented the objective grounds for the establishment of the standards through technical materials, certification procedures, and minutes of decision-making meetings.

Through this, the attorney emphasized that the measure was not an act restricting competition, but a legitimate technical decision.

The attorney made clear that the standards at issue were not aimed at a particular competitor, but were an operating principle applied equally to all partner companies.

By presenting the existence of alternative suppliers and prior transaction examples, the attorney supported the conclusion that there had been no intent to exclude, and emphasized that the matter should be judged by reference to the standard of the overall market structure rather than intent.

The attorney divided the Fair Trade Commission's inquiries into technical issues and legal issues, and prepared a structured written response.

In addition, by cooperating with the technical and quality-management departments and presenting materials centered on figures and facts, the attorney minimized the possibility of misunderstanding.

By adding comparison tables and reference materials, the attorney emphasized that the company's decision-making process had been transparent and reasonable.

The Monopoly Regulation and Fair Trade Act strictly regulates acts by a company that holds a superior position in the market and harms the competitive order, and specifies the following acts as acts of abuse of a market-dominant position.

▶ Types of Abuse of a Market-Dominant Position

Where such an act of abuse of a market-dominant position is found, the Fair Trade Commission may order the following corrective measures.

In addition, a company may be subject to a penalty surcharge of up to 6% of its sales, and where it is difficult to calculate sales, a penalty surcharge of up to 2 billion won may be imposed.

A Fair Trade Commission investigation comprehensively evaluates not only a company's technical measures and internal policies, but also its intent and its market impact.

In this process, where the facts are complex or the materials are extensive, mere self-handling alone may give rise to misunderstanding.

Therefore, the systematic organization of materials and legal judgment must proceed together from the early stage of the investigation, and securing an assistance system with the requisite expertise is the key to a strategic response.

On the basis of the experience and expertise accumulated through handling fair-trade cases over many years, our firm forms a task-force team to assist clients.

We organize the facts and internal materials from the early stage of the investigation, prevent in advance the legal risks that may arise during the investigation, and, where necessary, comprehensively support the client by preparing written opinions and statements.

If you are facing a Fair Trade Commission investigation and need legal help, please feel free to request assistance at any time through 🔗Legal Consultation Booking.