시장지배적 사업자의 거래거절에 대한 공정거래법리: 대법원의 포스코 사건 판결

On November 11, 2007, the Korean Supreme Court vacated and remanded the High Court's decision upholding the findings by the Korea Fair Trade Commission (KFTC) that POSCO, the largest Korean steel manufacturer, has abused its market dominance in refusing to supply certain hot coils to Hyundai Hysco, an affiliate of Hyundai Motor Group manufacturing steel sheets for automobiles. This landmark decision by the Supreme Court has a number of implications on the interpretation and application of the Monopoly Regulation and Fair Trade Law (FTL), especially in relation to the abuse of market dominance. Throughout the KFTC and subsequent court proceedings, many issues have been raised and disputed by the parties, such as: (1) whether POSCO has market dominance for the purpose of the FTL, (2) whether POSCO's refusal to supply in this case was unfair or anti-competitive and (3) further in relation to the market dominance, what the relevant market is in terms of product (i.e., whether the market for hot coils for automobiles constitutes a separate product market) and geography (i.e., whether the relevant geographic market is Korea or the Northeast Asia). Among these issues, the core issue that was rather fiercely disputed and debated by the parties was: what is the boundary under the FTL on the freedom of a company with market dominance to engage in market activities or to enter into contractual relationships. In other words, the question is under what circumstances the exercise by such company with market dominance of its freedom to choose its business counter-party, which should be protected under the civil law principles, may be considered a violation of the FTL. As for the issue of the abuse of market dominance, the Supreme Court held that the unfairness or anti-competitiveness of refusal to deal by a company with market dominance would be established only when such refusal causes a substantial anti-competitive impact on the market and that the mere fact that the counter-party has suffered difficulties or disadvantages in its business would be insufficient to prove the unfairness or anti-competitiveness. The relevant part of the Supreme Court's decision reads: "it is not sufficient to find refusal to deal by a company with market dominance unfair based on the mere fact that the company with market dominance refused to deal with a particular counter-party with an unfair intent or purpose or such counter-party has suffered or is expected to suffer certain difficulties in its business due to the refusal. The refusal to deal by a company with market dominance would be found unfair when both of the following requirements are met: (i) that the refusal was made with the intent or purpose to artificially influence the market order by restraining free competition in the market, such as to maintain or strengthen the monopoly, and (ii) that the refusal was objectively viewed as an act that would likely to cause such anti-competitive effect." Further, the Supreme Court held: "the difficulties pointed out by Hyundai Hysco in this case are only specific disadvantages that Hyundai Hysco has suffered by POSCO's refusal to deal and do not evidence that an anti-competitive effect on the relevant market has been actually resulted in. According to the materials submitted to the court, despite POSCO's refusal to deal, Hyundai Hysco continued its manufacture of steel sheets using the hot coils imported from Japan and has been in normal operation as the manufacturer and supplier of steel sheets, constantly realizing profits since 2001 when the newly built steel sheet manufacturing plant began its operation. In addition, there has been no indication of restraint on the competition after POSCO's refusal to deal, such as reduction in production of steel sheets in Korea or increase in price, etc. Therefore, it is difficult for this court to uphold the High Court's decision that there was restraint on the competition." The noteworthy implications from this recent Supreme Court's decision can be summarized as follows: First, the Supreme Court made it clear what needs to be shown in finding a refusal to deal by a company with market dominance anti-competitive. In other words, this is the first case addressing the permissible scope of regulation on the freedom of a company with market dominance to engage in business activities, by clarifying the following: Even in the case of a company with market dominance, unless the refusal by such company is viewed to substantially restrict the market competition, the mere fact that the counter-party suffered disadvantages in its business as a result of the refusal is not sufficient to establish the anti-competitiveness of such refusal. In addition, among the types of refusal to deal, the Supreme Court differentiated the refusal to newly begin a business relation from the refusal to continue an on-going business relation and stated that, although the refusal to continue to deal is likely to have an anti-competitive impact by reducing the number of the existing competitors or restricting the business capability of such competitors, it would be difficult to find the refusal to newly begin a business relation anti-competitive on its own unless there is a substantial barrier to the market entry. The Supreme Court's recognition and application of this legal principle is consistent with the regulation of the monopolization or attempt to monopolize under Article 2 of the Sherman Antitrust Act in the U.S. and the regulation on abuse of market dominance under Article 82 of the EC Treaty. In this regard, it is also meaningful that the Supreme Court has recognized the standard that has been adopted by anti-competition authorities in other major jurisdictions. Second, this Supreme Court's decision is expected to have a significant influence on the regulation on abuse of market dominance in general, not only with respect to the refusal to deal. In other words, the Supreme Court in this case has made clear that in the case of the abuse of market dominance regulated under Article 3-2 of the FTL, objectively showing of the effect of restraint on the market is required, unlike in the case of the regulation of unfair trade practices under Article 23 of the FTL, in which the unfairness may be rather simply assessed in the relationship with the counter-party. Under FTL, a refusal to deal by a company may be subject to sanction either as abuse of market dominance under Article 3-2 or unfair business practices under Article 23, depending on whether it is a market dominant firm. This is different from the other major jurisdictions including the EU or the U.S., in which only a market dominant firm or a firm with monopoly power is subject to antitrust prohibition of a refusal to deal. In relation to a case involving a refusal to deal as regulated under Article 23 of the FTL (i.e., a refusal case not involving a company with market dominance), the Supreme Court has addressed the standard in determining whether the difficulties of the counter-party caused by the refusal is sufficient to find the refusal anti-competitive. In its decision rendered in 2001 (98du17869), the Supreme Court indicated that the "difficulties"suffered by the counter-party should be more than mere inconvenience or disadvantage. For example, the Supreme Court stated that if the counter-party has no other alternative to continue its business if the deal is refused, then it would be appropriate to find the refusal unfair. Please note that this case should be differentiated from the POSCO case discussed in this article as the Supreme Court in this case focused on the individual impact on the counter-party in assessing the unfairness of the refusal. Therefore, in relation to other types of abuse of market dominance, such as tying, exclusive dealings and predatory pricing, simply showing that the counter-party has suffered certain disadvantages without proving that the competition in the market has been substantially restrained, would not be sufficient to hold the company with market dominance liable for violation of the FTL.