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In 2008, the Korea Fair Trade Commission (“KFTC”) investigated alleged 10 years of price-fixing cartels, the four Ramen manufacturers. In 2012, the KFTC issued a cease and desist order that imposed huge fines on the companies. In response, the companies filed a lawsuit before Seoul High Court, which rejected the claim. They appealed to the Supreme Court, which overturned and reversed the case.

Ramen prices have increased by at least six times over a decade. In particular, the KFTC presented two official in-person meetings between the defendants and hundreds of e-mail communications between the defendants in order to prove the price-fixing agreement. The issue was whether an agreement could be established or inferred from hearsay statements that were submitted via leniency applicant or circumstantial evidence presented by the KFTC. Article 19(1) of the Monopoly Regulation and Fair Trade Act (“MRFTA”) stipulates that “[n]o enterpriser shall agree with other enterprisers by contract, agreement, resolution, or any other means, to jointly engage in an act falling under any of the following subparagraphs, which unfairly restricts competition or allow any other enterpriser to perform such unfair collaborative act.” The Supreme Court ruled that the KFTC was obliged to prove and that evidence was insufficient.

The Supreme Court ruled that the hearsay statements from leniency applicants were unreliable and circumstantial evidence such as parallel acts or exchanging confidential information of price increase are not sufficient to infer an agreement. In South Korea, parallel actions and information exchange are being considered as circumstantial evidence that may be inferred to an agreement.

From a global perspective, I believe that the Supreme Court was overly and unduly strict about establishing or inferring an agreement in this case. Here, many direct and ircumstantial evidence was evident such as from leniency applications, increase in parallel prices, and exchange of price information via e-mail.