By Kim Rahn
The top court has ruled that a 108 billion won fine imposed by the anti-trust watchdog on Nongshim for leading price-fixing of instant noodles was improper.
The decision may affect lawsuits filed by two other ramyeon manufacturers ― Ottogi and Korea Yakult ― which were accused of colluding with Nongshim.
The Supreme Court on Thursday sent the case back to the Seoul High Court, ordering the high court to review it again. Its earlier ruling found the fine proper.
Nongshim, the nation’s top instant noodle manufacturer, filed the suit against the Fair Trade Commission (FTC) in protest of the fine, claiming there was no collusion among the ramyeon manufacturers.
“Nongshim exchanged its plans with other companies about when and how much it would raise prices of its products, but the exchange does not directly mean they colluded to fix prices,” the top court said. “It has also been customary that the leader of the domestic ramyeon market raise its prices and others follow suit. So we don’t regard Nongshim and others as fixing their prices.”
In 2012, the FTC accused Nongshim, Ottogi, Korea Yakult and Samyang for rigging instant noodles prices over six occasions from May 2001 to February 2010 by organizing executives’ meetings.
It said that Nongshim, which accounts for more than 60 percent of the instant noodle market, led the collusion by revealing its plans to hike prices to the other companies.
The anti-trust watchdog fined Nongshim 108 billion won, while slapping 9.8 billion won in fines on Ottogi and 6.2 billion won on Korea Yakult.
Samyang voluntarily reported the price-fixing to the FTC, so it was exempted from punishment, which otherwise could have reached 12 billion won.
In protest of the penalty, Nongshim filed the lawsuit, saying the testimony from Samyang executives lacked credibility and there was no objective evidence. Nongshim said it had no reason to fix prices with the other companies because it is the market leader.
But the high court determined what they were doing was price-fixing, saying when Nongshim made an internal decision on price hikes, Ottogi immediately decided to hike its prices at the same price as Nongshim’s, and this was possible only through prior agreement between the companies.
Ottogi and Korea Yakult also filed suits in protest of the penalties. They lost at the high court and are waiting for the Supreme Court decision.