The Issue of Information Exchanges Regarding Price under Competition Law: Comments on the Supreme Court’s Judgment on the Ramen Cartel from a Comparative Perspective

There is no doubt that cartels are one of the most harmful business practices, and most competition regimes have treated this conduct as a supreme evil. In particular, a hard-core cartel directly influences the social welfare because it creates market power through agreements, thereby extracting all consumer welfare. In most competition jurisdictions, there are two important elements for bringing a competition law case against a hard-core cartel: Proof of the existence of an agreement and of its prevention of competition. Likewise, the two-prong test lies at the heart of cartel enforcement. Regarding the requirements for evidence of an agreement, competition regimes have developed their own scrutiny tests. The Korean competition regime is not an exception. Article 19(1) MRFTA sets forth its prohibition of anti-competitive agreements between competing undertakings, and this provision proscribes any anti-competitive conduct by contract, agreement, resolution, or other means of considerable business practices. The Korean competition authority has vigorously enforced this legal measure against horizontal agreements that are concluded by competing economic entities. Nonetheless, the KFTC recently failed to bring direct evidence of the first criterion, the existence of an agreement. The Supreme Court of Korea annulled the judgment of the Seoul High Court and the decision of the KFTC on 24 December 2015, and it has raised some critical issues, such as the importance of direct evidence of an agreement and the market effect of the sharing of price information. In order to discuss the issue of information sharing, this article aims at providing an analysis of the ramen cartel, with a comparative study of the rules regarding the sharing of information on prices.