The Legal 500

 

 

   Court Decision on Collusion Case Regarding Compensation for Commission Rate Tied to Personal Life Insurance Products   Following the Korea Fair Trade Commission (“KFTC”)’s correction order and imposition of administrative fines on December 15, 2011 against 16 life insurance companies for their engagement in unfair concerted action (cartel), consumers that purchased the insurance policies (the “Complainants”) brought a number of civil actions against these 16 life insurance companies.   On April 25, 2014, and on June 27, 2014, the Seoul Central District Court issued judgments on a number of these civil cases in favor of the life insurance companies on grounds that the aforementioned life insurance companies had not been conclusively found to have engaged in unfair concerted action.

In its press release on March 17, 2014, the Korea Fair Trade Commission (the "KFTC") blocked the proposed acquisition of 50% shares by Essilor Amera Investment Pte. Ltd. (a subsidiary of Essilor International S.A., the largest optical lens maker in the world) in Daemyung Optical Co., Ltd. (the second largest optical lens maker in Korea) citing inter alia the likely lessening effect on price competition and the probable future abuses of the enhanced market power. On top of the expressed competitive concerns, the KFTC observed that allowing foreign firms to acquire local firms and turn them into their local sub-contractors worsens the competitive market structure of the domestic optical lens industry.

The Personal Information Protection Act ("PIPA") was enacted as a general law of personal information in March 2011 to fulfill the need for presiding rules to govern personal information protection. In fact, there have already been a number of special laws governing personal information protection in various special areas and cases, such as The Act on Promotion of Information and Communications Network Utilization Information Protection ("Network Act") governing information and communications services, and the Use and Protection of Credit Information Act ("Credit Information Act") governing personal credit information. Special laws prevail over the general law, when in conflict with individual articles of the general law.

The following is a summary of the press releases made by the Financial Services Commission on 10 March 2014. These are action items and policies that the FSC and relevant ministries are seeking to implement. The following measures have developed from a series of measures previously announced since the data leakage from the three credit card companies were revealed last January.

In its press release on March 17, 2014, the Korea Fair Trade Commission (the "KFTC") blocked the proposed acquisition of 50% shares by Essilor Amera Investment Pte. Ltd. (a subsidiary of Essilor International S.A., the largest optical lens maker in the world) in Daemyung Optical Co., Ltd. (the second largest optical lens maker in Korea) citing inter alia the likely lessening effect on price competition and the probable future abuses of the enhanced market power. On top of the expressed competitive concerns, the KFTC observed that allowing foreign firms to acquire local firms and turn them into their local sub-contractors worsens the competitive market structure of the domestic optical lens industry.

1. First Trial Court Decision on Employer's Good Faith Argument On December 18, 2013, the Supreme Court of Korea made an en banc decision that ordinary wage includes regularly paid fixed bonus amounts. The Supreme Court also expressly noted that if an employer is able to prove that (i) there is an agreement between the employer and the labor union that fixed bonuses are excluded from ordinary wages and (ii) paying employees for past underpayment of overtime wages will cause a substantial detriment to the management or a major threat to the existence of the company due to the unexpected financial burden, then employees' claims for past underpayment can be denied based on the principle of good faith. However, the Supreme Court did not provide specific criteria for such denial, which caused controversy over the definite scope of application of its judgment (please refer to our newsletter of December 19, 2013 in this regard).

Criminal breach of duty, or bae-im in Korean, is a typical crime on which owners, directors, officers or managers of corporations and businesses in Korea are frequently indicted. A person commits bae-im when he or she, in dealing with the affairs of another person, breaches his or her duty and obtains, or enables a third person to obtain, a pecuniary advantage through such breach, thereby causing a loss to the person to whom the duty is owed. Bae-im is similar to the concept of Untreue under German law, while bae-im is broader in scope than Untreue in that a mere attempt to commit bae-im is also punishable in Korea.

On September 19, 2014, the Act on Protection of Fixed-Term and Part-time Workers ("Temporary Workers Act") and the Act on Protection of Dispatch Workers ("Dispatch Workers Act") were amended to offer greater protections to non-regular workers. In particular, (i) employers will be subject to greater economic implications if they receive a corrective order for discriminatory treatment of non-regular workers and (ii) part-time workers will be entitled to receive compensation for any overtime work performed.

The Korean Government has launched a government project to establish a system to compensate and insure against environmental pollution damage, and is pursuing the introduction of a legal relief system for environmental pollution damage. Such Government initiative is intended to address the current situation where environmental pollution accidents inflict serious damage on society due to the enormous amount of tax money that is required for curing the pollution, while companies that caused the accident sometimes go bankrupt because they cannot bear the financial burden of paying the compensation. Moreover, the victims of environmental pollution accidents are often unable to obtain proper compensation due to the burden of proving that their injury resulted from the pollution or due to the prolonged litigation process which is unavoidable in light of the nature of environmental pollution.