Enforcement

Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

Private parties can complain about alleged unlawful vertical restraints to the OTCC in writing, verbally or by electronic means, in accordance with the OTCC’s regulations. The OTCC will refer the complaint to the Secretary-General of the Commission, who will request the Commission’s lawyers to opine on any violations of applicable law. The Secretary-General of the Commission will then make a decision, which will be delivered to the complainant within 15 days of the date of the decision.

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

Most cases investigated by the Commission involve unfair trade practices and abuse by dominant market powers. The majority of cartel cases involve horizontal agreements. The number of cases involving vertical restraints remains low.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

Agreements containing vertical restraints do not automatically become null and void. If the Commission has sufficient evidence to believe that a violation of competition law has occurred, then the Commission has the power to order the operator to suspend, stop, correct or alter its business conduct. However, the Commission may only order the offending clauses to be amended; the remaining contract will not be affected.

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

Section 60 of the TCA 2017 provides that, if the Commission has sufficient evidence to believe that an operator has violated or will violate the law, then the Commission may order the operator to suspend, stop, correct or alter its business conduct. In issuing such order, the Commission may impose conditions that are required in order to achieve the purposes of the law. In addition, the Commission is empowered to issue administrative fines directly to operators for perceived vertical restraint offences. Any operator in receipt of an order, who disagrees with such order’s issuance, has the right to file a lawsuit in an administrative court within 60 days of receiving the order.

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

Section 63 of the TCA 2017 grants broad investigative powers to the OTCC, which include:

(i) the power to issue a subpoena for any person to provide an oral presentation, factual information or an explanation in writing, or to provide accounts, documents, registrations or any evidence for examination or consideration;

(ii) the power to enter places and venues of operation, production, sale, purchase, storage or service provision of a business operator or other person, or any place where it is reasonably believed that a violation of competition law is occurring or has occurred for the purposes of searching and seizing, or gathering accounts, documents, registrations or any evidence for the benefit of examination or consideration and proceeding with a case under the law. In such case, the OTCC has the power to inquire into factual information or call for accounts, documents, registrations or other evidence from business operators or relevant persons, as well as instruct any person on the premises to act as necessary; and

(iii) the power to collect or bring goods in the required quantity as a sample for examination or analysis without paying for the goods.

In the case of (ii), if a search is being carried out pursuant to the Criminal Procedure Code, then a search warrant is required unless there is cause to believe that the process of obtaining the warrant may result in a delay and that documents or other evidence may be removed, hidden, destroyed or changed, in which case officers are permitted to proceed to search, seize or gather the documents or evidence without the warrant. The Criminal Procedure Code must, however, be followed at all times. Beginning a search at night is prohibited unless it is the operational time of the place being searched.

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

Any person suffering damage as a result of a violation of competition law has the right to file for compensation against the offender to the Intellectual Property and International Trade Court. In filing a lawsuit for damages, the Consumer Protection Commission, or associations or foundations that the Consumer Protection Commission recognises under the law on consumer protection, has the right to file a lawsuit for damages on behalf of consumers or the members of such associations or foundations. The lawsuit must be filed within one year of the date that the person suffering damages knows (or should have known) the cause of such damage; otherwise, the right to bring the case to court lapses.