Law Firm Cheongchul (Lead Attorneys: Lee Yeong-kyung, Eom Sang-yoon) represented the Fair Trade Commission and proved the legality of the disposition in the first case of collusion in the bidding for household waste collection services, resulting in a victory (the plaintiff's claim was dismissed).

In order to resolve controversies arising from the selection of agents through long-term negotiated contracts, the Seoul Metropolitan Government changed the method of selecting household waste collection and transportation agencies from negotiated contracts to competitive bidding starting around 2015. To maintain the existing regions, four companies, including Company A, reached a prior agreement on successful bidders and bid prices in the regional bids of 2017 and 2019.

The Fair Trade Commission regarded the actions of Company A and the other four companies as unfair joint actions (collusion) prohibited by the Fair Trade Act, issuing a corrective order alongside a fine payment order.

The plaintiffs argued that the identical bid rates in this case were due to administrative guidance, claiming the absence of an agreement, and that there was no unfairness or restriction on competition.

In response, Law Firm Cheongchul, representing the Fair Trade Commission, explained during the litigation process that collusion existed in this case through the evidence. They also asserted that the plaintiffs' collusive actions had unfairly restricted competition in the relevant market through a thorough analysis of the facts.

In response, the Seoul High Court accepted Cheongchul's opinion, dismissed all claims from the plaintiffs, and recognized the legality of the Fair Trade Commission's disposition.

In particular, the Seoul High Court stated that (i) agreements include not only explicit agreements but also implicit agreements, and because this is essentially about the communication of intent among multiple businesses, if circumstances proving mutual intent connection among businesses are established, it can be judged that an agreement existed (see Supreme Court ruling 2013. 11. 28. 2012Du17421, Supreme Court ruling 2014. 6. 26. 2012Du4104, etc.), it recognized agreements among the plaintiffs regarding bid areas, successful bidders, and bid rates, and (ii) whether any joint action has 'restrictiveness on competition' should be individually assessed based on various circumstances, such as the characteristics of the relevant goods or services, consumer product choice criteria, and the impact on market and business competition, examining whether competition in a certain trading area is reduced and whether it affects or is likely to affect the determination of price, quantity, quality, and other trading conditions (see Supreme Court ruling 2013. 11. 14. 2012Du19298, etc.), and recognized that competition in the market for household waste collection and transportation services had been unfairly restricted due to the plaintiffs' collusion.

This case is the first instance where the Fair Trade Commission sanctioned collusion in the bidding for household waste collection and transportation services. Cheongchul holds significant meaning by explaining the content and legal principles of the Fair Trade Commission's first sanction case to the court so that the first sanction case could be recognized as lawful by the court.

Furthermore, Cheongchul can be seen as having reaffirmed its expertise in fair trade by achieving a complete victory (appeal dismissed) in the appeal of this case, representing the Fair Trade Commission.

If you need a solution for disputes related to fair trade, please feel free to contact Law Firm Cheongchul.