Open Decision Ledger · Competition & fair trade
Merger succession and the reach of a KFTC notification order
Supreme Court, May 12, 2022, 2022Du31433 (judgment)
Case name: 시정명령등취소
Official text on the National Law Information Center
Question
Where a company absorbed by merger had committed unfair trade practices, may the Korea Fair Trade Commission make a corrective order against the surviving company and order it to notify all dealers currently trading with it, including dealers that had never traded with the pre-merger company, without that order being an abuse of discretion?
Holding
Yes. Rights and obligations of the absorbed company pass to the surviving company in both private and public law, save those whose nature forbids transfer, so a corrective order may be made against the surviving company for the pre-merger conduct. Under Articles 24 and 23 the Commission may take whatever measures it considers necessary to correct the violation and has discretion over the necessity and content of those measures; a notification order is aimed not at compensating its counterparties but at preventing recurrence, so counterparties need not be those directly affected and may include dealers with a strong likelihood of future effect. The Supreme Court reversed the part of the judgment below that annulled the notification order in respect of dealers who had not traded with the pre-merger company.
Summary of the holding, verbatim
따라서 통지명령의 상대방은 반드시 당해 위반행위에 의하여 직접 영향을 받았던 자로 한정되어야 하는 것은 아니고, 그 취지와 필요성 등을 고려하여 향후 영향을 받을 가능성이 큰 자도 이에 포함될 수 있다.
Unofficial English translation
Accordingly, the counterparty to an order to notify need not necessarily be limited to those who were directly affected by the violation at issue, and those who are highly likely to be affected in the future may also be included therein, in consideration of its purpose, necessity, and the like.
Disposition
Partly reversed and remanded Stated in the decision
원심판결 중 피고 패소 부분을 파기하고, 이 부분 사건을 서울고등법원에 환송한다. 원고들의 상고를 모두 기각한다.
Unofficial English translation
In the judgment of the court below, the part in which the defendant lost is reversed and remanded to the Seoul High Court. All appeals of the plaintiffs are dismissed.
Form of the test
Circumstances weighed Stated in the decision
그 취지와 필요성 등을 고려하여 향후 영향을 받을 가능성이 큰 자도 이에 포함될 수 있다.
Unofficial English translation
those who are highly likely to be affected in the future may also be included therein, in consideration of its purpose, necessity, and the like.
Factors
- 회사합병이 있는 경우에는 피합병회사의 권리·의무는 사법상의 관계 혹은 공법상의 관계를 불문하고 그 성질상 이전이 허용되지 않는 것을 제외하고는 모두 합병으로 인하여 존속한 회사에 승계되는 것으로 보아야 한다
- 위반행위를 시정하기 위하여 필요하다고 인정되는 제반 조치를 할 수 있고
- 시정의 필요성 및 시정에 필요한 조치의 내용에 관하여는 공정거래위원회에 그 판단에 관한 재량이 인정된다
- 통지명령의 상대방에 대한 피해구제가 목적이 아니고
- 향후 영향을 받을 가능성이 큰 자도 이에 포함될 수 있다
Unofficial English translation
• In the event of a merger, all rights and obligations of the merged company, whether in relations under private law or relations under public law, must be regarded as being succeeded to by the company surviving the merger, except for those whose transfer is not permitted by their nature
• all measures deemed necessary to rectify the violation may be taken, and
• the Fair Trade Commission is recognized as having discretion in making the determination regarding the necessity of rectification and the content of the measures necessary for the rectification
• the purpose of the order to notify is not to provide relief for damages to the counterparty to the order to notify, and
• those who are highly likely to be affected in the future may also be included therein
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2004. 7. 8. 선고 2002두1946 판결(공2004하, 1342)
Unofficial English translation
Supreme Court Decision 2002Du1946 decided July 8, 2004 (Gong 2004 Ha, 1342)
Decisions referred to
[1] 대법원 2004. 7. 8. 선고 2002두1946 판결(공2004하, 1342) / [2] 대법원 2009. 6. 11. 선고 2007두25138 판결, 대법원 2010. 11. 25. 선고 2008두23177 판결(공2011상, 32)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
How great must the likelihood of future effect be before a dealer that never traded with the pre-merger company may be made a counterparty to the notification order?
A later decision on who may be ordered to notify under Article 24 of the Monopoly Regulation and Fair Trade Act or the equivalent provision of the Agency Transactions Act would call for this entry to be read again. Any amendment to those provisions, or a record showing that the surviving company had ceased the business in which the violations occurred, would likewise change the analysis.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-25
A reader from another model family (GPT-6 Astra), given the official text but not the primary reading, agreed on 7 of the 8 axes; the readings differed on axis 4 (form of the test).
Axis 4 (Form of the test): Primary “Circumstances weighed” vs Independent “Elements stated”
The primary reading frames the discretion question as a holistic weighing of purpose and necessity, while the independent reading presents the requirements as stated conditions such as non-transferability, necessity, and likely future effect.
통지명령의 상대방은 반드시 당해 위반행위에 의하여 직접 영향을 받았던 자로 한정되어야 하는 것은 아니고, 그 취지와 필요성 등을 고려하여 향후 영향을 받을 가능성이 큰 자도 이에 포함될 수 있다.Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The Seoul High Court, in its judgment of 9 December 2021 (2020Nu62299), held that, as to the surviving company SK Broadband, requiring notice to the dealers that had not traded with the pre-merger T-broad but were trading with it when the corrective order was received went beyond what was needed, while it found the rest of the notification order proportionate. It reasoned that several years had passed before the merger, that only about 20 of some 1,250 dealers concerned the violations, that the surviving company did not trade with dealers in the same way, and that notice to the others risked needless mistrust of its ordinary dealings, so that part of the notification order breached the principle of proportionality and was annulled.
Supreme Court standard: The Supreme Court found no error in the findings that the forcing of purchases, the coercion of economic benefits and the provision of disadvantages were violations, nor in holding that the surviving company had succeeded to the pre-merger company's obligations so that the corrective order against it was lawful. On the notification order, however, it held that the court below had misapprehended the law on corrective measures: because the surviving company retained its identity and continued its business, similar violations could well recur, and notifying all dealers then trading with it was a measure reasonably capable of preventing recurrence. It reversed the part of the judgment below where the defendant lost and remanded that part to the Seoul High Court, while dismissing all of the plaintiffs' appeals.
Distinguishing conditions
- A right or obligation of the absorbed company whose nature forbids transfer, since the succession rule the Court stated leaves those out.
- A measure the Commission cannot show to be necessary for correcting the violation, since its discretion runs only over measures it regards as necessary under Article 24 or Article 23.
- A counterparty with little likelihood of being affected by the same or a similar violation in the future, which the Court's reasoning would leave outside the notification order.
Record verification notes
Set the merger against the rule first: confirm the type of merger and that the obligation enforced is not one of the obligations whose nature forbids transfer. Then check which statutory text governs, since the decision applied Article 24 of the former Monopoly Regulation and Fair Trade Act and Article 23 of the former Agency Transactions Act, with Article 49 of the current Act noted as the counterpart. Finally compare the composition of the notification list with the dealers linked to the violations and with the recurrence risk on the record.
From the official text
Points at issue
[1] 회사합병이 있는 경우, 피합병회사의 권리·의무는 모두 합병으로 존속한 회사에 승계되는지 여부(원칙적 적극) [2] 공정거래위원회가 구 독점규제 및 공정거래에 관한 법률 제23조 제1항 또는 제2항, 제23조의2 또는 제23조의3, 구 대리점거래의 공정화에 관한 법률 제6조부터 제12조를 위반한 사업자에 대하여 위반행위를 시정하기 위해 필요한 제반 조치를 할 수 있는지 여부(적극) 및 공정거래위원회에 이러한 시정의 필요성 및 시정에 필요한 조치 내용의 판단에 관한 재량이 인정되는지 여부(적극) [3] 공정거래위원회가 구 독점규제 및 공정거래에 관한 법률 제24조, 구 대리점거래의 공정화에 관한 법률 제23조에 따라 해당 사업자에 대하여 시정명령을 받은 사실을 통지하도록 명하는 경우, 통지명령의 상대방이 될 수 있는 자의 범위
Unofficial English translation
[1] Whether, in the event of a merger, all rights and obligations of the merged company are succeeded to by the company surviving the merger (affirmative as a rule) [2] Whether the Fair Trade Commission may take all measures necessary to rectify the conduct of a business entity that violated Article 23 (1) or (2), Article 23-2, or Article 23-3 of the former Monopoly Regulation and Fair Trade Act, or Articles 6 through 12 of the former Act on Fair Transactions in Distributorship (affirmative); and whether the Fair Trade Commission is recognized as having discretion in determining the necessity of such rectification and the content of the measures necessary for the rectification (affirmative) [3] The scope of persons who may become the counterparty to an order to notify when the Fair Trade Commission orders a business entity to notify of the fact that it has been issued a corrective order pursuant to Article 24 of the former Monopoly Regulation and Fair Trade Act and Article 23 of the former Act on Fair Transactions in Distributorship
Summary of the holding
[1] 회사합병이 있는 경우에는 피합병회사의 권리·의무는 사법상의 관계 혹은 공법상의 관계를 불문하고 그 성질상 이전이 허용되지 않는 것을 제외하고는 모두 합병으로 인하여 존속한 회사에 승계되는 것으로 보아야 한다. [2] 구 독점규제 및 공정거래에 관한 법률(2017. 4. 18. 법률 제14813호로 개정되기 전의 것, 이하 ‘구 공정거래법’이라 한다) 제24조, 구 대리점거래의 공정화에 관한 법률(2018. 1. 16. 법률 제15361호로 개정되기 전의 것, 이하 ‘구 대리점법’이라 한다) 제23조의 문언 내용에 비추어 보면, 공정거래위원회는 구 공정거래법 제23조 제1항 또는 제2항, 제23조의2 또는 제23조의3, 구 대리점법 제6조부터 제12조를 위반한 사업자에 대하여 위반행위를 시정하기 위하여 필요하다고 인정되는 제반 조치를 할 수 있고, 이러한 시정의 필요성 및 시정에 필요한 조치의 내용에 관하여는 공정거래위원회에 그 판단에 관한 재량이 인정된다. [3] 공정거래위원회는 구 독점규제 및 공정거래에 관한 법률(2017. 4. 18. 법률 제14813호로 개정되기 전의 것, 이하 ‘구 공정거래법’이라 한다) 제24조, 구 대리점거래의 공정화에 관한 법률(2018. 1. 16. 법률 제15361호로 개정되기 전의 것, 이하 ‘구 대리점법’이라 한다) 제23조에 따라 위반행위를 시정하기 위하여 필요하다고 인정되는 조치의 하나로 해당 사업자에 대하여 시정명령을 받은 사실을 통지하도록 명할 수 있다. 이러한 시정조치는 현재의 법 위반행위를 중단시키고, 향후 유사행위의 재발을 방지·억지하며, 왜곡된 경쟁질서를 회복시키고, 공정하고 자유로운 경쟁을 촉진시키는 데에 취지가 있는 것으로, 그중 통지명령은 통지명령의 상대방에 대한 피해구제가 목적이 아니고, 통지명령의 상대방으로 하여금 해당 사업자의 위반행위를 명확히 인식하도록 함과 동시에 해당 사업자로 하여금 통지명령의 상대방이 지속적으로 위반행위 여부를 감시하리라는 것을 의식하게 하여 향후 유사행위의 재발 방지·억지를 보다 효율적으로 하기 위한 것이다. 따라서 통지명령의 상대방은 반드시 당해 위반행위에 의하여 직접 영향을 받았던 자로 한정되어야 하는 것은 아니고, 그 취지와 필요성 등을 고려하여 향후 영향을 받을 가능성이 큰 자도 이에 포함될 수 있다.
Order
원심판결 중 피고 패소 부분을 파기하고, 이 부분 사건을 서울고등법원에 환송한다. 원고들의 상고를 모두 기각한다.
Unofficial English translation
In the judgment of the court below, the part in which the defendant lost is reversed and remanded to the Seoul High Court. All appeals of the plaintiffs are dismissed.
Provisions referred to
[1] 상법 제174조 [2] 구 독점규제 및 공정거래에 관한 법률(2017. 4. 18. 법률 제14813호로 개정되기 전의 것) 제24조(현행 제49조 참조), 구 대리점거래의 공정화에 관한 법률(2018. 1. 16. 법률 제15361호로 개정되기 전의 것) 제23조 [3] 구 독점규제 및 공정거래에 관한 법률(2017. 4. 18. 법률 제14813호로 개정되기 전의 것) 제24조(현행 제49조 참조), 구 대리점거래의 공정화에 관한 법률(2018. 1. 16. 법률 제15361호로 개정되기 전의 것) 제23조
Read 2026-10-25 · Cross-read 2026-10-25. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
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