According to the proposed amendment bill, preliminarily announced by the Korea Fair Trade Commission ('KFTC') on May 7, 2004, (KFTC revised the presumption clause for the amount of damages, from the proposed amendment bill of May 7, 2004, when submitting the revised proposal on June 23, 2004), one of the essential features of the proposed amendment bill is the dramatic improvement of the damage compensation system, the aim of which is to promote a system of private enforcement. This amendment bill has passed the competent standing committee, that is, the National Policy Committee in its original form as presented, as well as the Legislation and Judiciary Committee on November 30, 2004, and is awaiting the approval of the plenary session which is close at hand. The current system for damage compensation under the Monopoly Regulation and Fair Trade Law ('FTL'), which is a separate system from that under Article 750 of the Civil Code, is understood as providing a separate right to compensation, independent from the right to compensation under the Civil Code. This is because the former acknowledges strict liability, the principle that a corrective order should be final and conclusive, and a separate system of statute of limitation which period is shoter than that in the Civil Code, and it has been well established that the two claim rights, the damage compensation right in KFTL and in the Civil Code, are concurrent. However, the proposed amendment bill has induced the fundamental change of characteristics in the damage compensation system under FTL, by converting it into the same right to compensation as that under Article 750 of the Civil Code thus getting out of the current differences of the two rights to make an integrated right, although there has been an amendment which transfers the burden of proof for intentional and negligent conducts, which is different from the general principle of Article 750 of the Civil Code. In the course of this process, the provisions pertaining to the principle that a corrective order should be final and conclusive and the system of shorter period of the statute of limitation, as well as strict liability have all been removed.
In addition, the system of the determination of damage amount awarded at the court's discretion is to be newly established under the proposed amendment bill. This shows the legislative intention to promote private enforcement by the increasing of antitrust suits, thus extending the court's discretionary power with respect to the acknowledgement of damage amount, as many have pointed out that the reason why there has only been a few antitrust suits claiming damages under the FTL, lies in the fact there have been many instances where it was impossible to meet the strict burden of proof required by the existing case law, regarding the calculation of damages.
I, as a member of the TF Team for Study of System for the Promotion of Private Actions, organized under the initiative of the KFTC around 2002, have participated in a study for promotion of private antitrust suits under the FTL, such as improvement of the compensation system and introduction of claim for injunction, for a period of one year. With the knowledge gained from such activities, I would like to add some comments which may be helpful, regarding how the proposed amendment bill at hand will change the antitrust damage compensation, and whether such changes will fit the legislative intention to promote private actions, and thus provide an introduction to the many discussions interpretation thereof, which will no doubt arise during the process of execution of the amendments.
Various proposals for revision to the amendment bill have been presented in the course of deliberation of the foregoing proposed amendment. Among them, the proposal by National Assembly member Seung-min Yu includes a clause concerning claims for injunction. There has been a doctrinal dispute concerning whether, even under the current system where no explicit provisions allow for injunction claims, it would be possible to claim for an injunction against conduct which is in violation of the FTL. The prevailing view, under Japanese influence, is that such claim is not allowable. Cases that acknowledge such claims coexist with those repudiating it in first instance cases, without any precedent at the level of the Supreme Court in this respect. The foregoing proposed revision to the amendment bill submitted by Mr. Yu, is a very desirable attempt which meets the current necessity of avoiding the uncertainty of these theories and precedents, while at the same time taking into account the need for the proper protection of the victims of FTL offenses. Nevertheless, because this proposed revision consists a single clause, it has resulted in an inadequate provision lacking in sufficient review concerning the appropriate procedures and supplementary provisions pursuant to the introduction of an injunction claim. Thus his proposal has failed in achieving its genuine intention, and is very unlikely to be legislated.
Having reviewed the proposed amendment bill, it seems that as a result of being overly conscious of the criticism directed at the principle that a corrective order should be final and conclusive, before a damage claim by FTL is filing, it is attempting a fundamental reform by integrating the compensation system for antitrust damages under the FTL, which has so far been a separate claim, into the claim for compensation under Article 750 of the Civil Code, with the proviso of the acknowledgment of the transfer of burden of proof. Of course, in circumstances where one cannot but rely on Article 750 of the Civil Code to make a claim for compensation of antitrust damages, the proposed amendment bill is not without positive aspects that contribute to the promotion of private antitrust suits, through the transfer of the burden of proof. However, the current compensation system under the FTL has some advantages such as strict liability, acknowledgment of de facto power to presume offensive acts as illegal which are accused by the conclusive corrective orders, and a longer short-term statute of limitation, unlike that of Article 750 of the Civil Code, and thus is able to protect the victims more effectively than that of Article 750 of the Civil Code. It is regrettable that the original amendment prepared by the FTC, that is, the proposal of taking down the 'final and conclusive corrective measures' to the completion of the decision process at the level of the FTC, has been handed down during the negotiations among Ministries, in order to resolve the current problem that one may not claim for antitrust damages until the final judgment of the Supreme Court, which has been the biggest target for criticism. Given that the chief reason why the damage compensation system has not been actively in use lies in the difficulty of proving the amount of damages, the newly introduced system acknowledging the amount of damages is epochal event. It is the most prominent one among the amendments to the private action system. From the perspective that it is difficult to abstractly regulate diverse methods of estimation for the amount of damages, the amendment at hand places quite a large portion of it in the court's discretion, that is the weight of evidence is to be determined at the court's discretion, through the legal procedures. Thus, such matter has been left behind to be developed through the accumulation of judicial precedents.
In the meantime, the amendment regarding injunction claims, despite the urgent necessity of its introduction, is required to be modified and supplemented, as it. is too simple to provide details and still has many problems.
In conclusion, in the case of the U.S., as the private enforcement sector, which enforces the fair trade law through claims for compensation and injunction, has been in active use, the private antitrust enforcement cases reportedly accounted for more than 90% of all enforcement cases. As such, I hope that our private enforcement system will also be activated through improvement so that market competition may thrive in our society.