Abuse of Superior Bargaining Position in South Korea: Supreme Court Upholds Sanctions on Parts Suppliers That Halted Supply to Force Long-Term Agreements
Supreme Court Upholds Sanctions on Parts Suppliers That Halted Supply to Force Long-Term Agreements
Contents
- 1. What conduct does the ban on abuse of a superior bargaining position target in South Korea?
- 2. When does a business have a superior bargaining position?
- 3. Is every disadvantageous term an “imposition of disadvantages”?
- 4. How do Korean courts decide whether the position was used “unfairly”?
- 5. Which sales are used to calculate the administrative surcharge?
- 6. What did the parts suppliers do in the 2026 case?
- 7. Why did the courts reject the suppliers’ arguments?
- 8. What should suppliers and buyers of components check?
- 9. What does this mean for foreign companies in IFEZ?
- 10. Frequently asked questions
A single smart device contains many components, and some of them cannot be replaced with another company’s product without considerable time and expense. If the supplier of such a component stops approving purchase orders, then halts shipments, technical support and even production while demanding a long-term agreement, a manufacturer with production schedules at stake will find it hard to say no.
That is what happened in a recent South Korean case. Smart device parts suppliers used these methods to make a manufacturer sign long-term agreements (LTAs) under which the manufacturer committed to buy at least a certain amount of components and to compensate the shortfall if it bought less. The Korea Fair Trade Commission (KFTC) treated this as an abuse of a superior bargaining position and issued a corrective order and an order to pay an administrative surcharge. The suppliers sued to cancel those orders, but on October 27, 2026, the Supreme Court of Korea dismissed all of their appeals (Supreme Court of Korea, October 27, 2026, 2026Du31449).
This article first explains what abuse of a superior bargaining position is and the standards Korean courts apply, using four Supreme Court decisions, and then looks at the 2026 case against those standards. The full text of the 2026 decision has not yet been released, so the article is based on the summary the Supreme Court (Supreme Court Library) published on October 28, 2026. The names of the companies, the term and value of the agreements, and the amount of the surcharge do not appear in that summary and are not given here.
What conduct does the ban on abuse of a superior bargaining position target in South Korea?
Korea’s Monopoly Regulation and Fair Trade Act (MRFTA) prohibits, as one of the unfair trade practices, “trading with a counterparty by unfairly using one’s trading position” (Article 45(1)(vi)). In Korean this is called georaesang jiwi namyong, literally “abuse of trading position,” which this article renders as abuse of a superior bargaining position. The rule stops the stronger party in a trading relationship from using its strength to push the other party into a disadvantageous deal.
An unfair trade practice is such conduct that “is likely to undermine fair trade,” and its specific types and standards are set by Presidential Decree (Article 45(1) and (3)). The 2026 case was decided under former Article 23(1)(iv) of the Act, the wording of which is the same as the current provision (Supreme Court of Korea, October 27, 2026, 2026Du31449).
The Supreme Court of Korea explains that the purpose of the rule is to prohibit an enterpriser that holds a relatively superior position, or at least a position that can significantly affect the counterparty’s business activities, from abusing that position to impose trading disadvantages on the counterparty, so that parties with unequal economic power in actual trading relationships can still trade fairly on an equal footing as the law intends (Supreme Court of Korea, March 27, 2014, 2012Du5589). The 2026 decision followed the same explanation (Supreme Court of Korea, October 27, 2026, 2026Du31449).
The Enforcement Decree lists five types
| Type | What the Enforcement Decree provides |
|---|---|
| Forced purchase | Forcing a counterparty to purchase goods or services it has no intention of purchasing |
| Coerced provision of benefits | Coercing a counterparty to provide money, goods, services or other economic benefits for one’s own benefit |
| Forced sales targets | Setting trading targets for a counterparty in connection with the goods or services one supplies and forcing it to meet them |
| Imposition of disadvantages | By methods other than those in items (a) through (c), setting or changing trading terms to the counterparty’s disadvantage, or imposing disadvantages on it in the course of performance |
| Interference with management | Requiring one’s instructions or approval for the appointment or dismissal of the counterparty’s officers or employees, or interfering with its management by restricting its products, facility size, output or transactions |
(MRFTA Enforcement Decree, Article 52 and [Appended Table 2], item 6.) The 2026 case concerned the fourth type, imposition of disadvantages. The decree in force at the time ([Appended Table 1-2], item 6(d)) had the same content (Supreme Court of Korea, October 27, 2026, 2026Du31449).
How is it different from abuse of a market-dominant position?
The Act separately prohibits abuse of a market-dominant position (Article 5). A market-dominant enterpriser is one that, alone or together with others, holds a market position that lets it determine, maintain or change prices, quantities, quality or other trading terms in a particular line of business, assessed by considering market share, entry barriers, the relative size of competitors and other factors (Article 2(iii)).
The ban on abuse of a superior bargaining position applies to enterprisers in general (Article 45(1)). The Supreme Court holds that a trading position can be found where one party is relatively superior or at least can significantly affect the counterparty’s business activities (Supreme Court of Korea, September 10, 2015, 2012Du18325). Because it is assessed in relation to a particular counterparty, the test differs from that for a market-dominant enterpriser, which looks at market share and similar factors (Article 2(iii)).
What are the sanctions?
The KFTC may order corrective measures such as stopping the violation and preventing its recurrence, deleting contract clauses, and publicly announcing that a corrective order was received (Article 49(1)), and it may impose an administrative surcharge of up to 4% of relevant sales (Article 50(1)). A person harmed or likely to be harmed may ask the violating business to stop or prevent the infringement (Article 108(1)), and a person who suffered harm may claim damages (Article 109(1)).
When does a business have a superior bargaining position?
It is enough to be relatively superior to the counterparty, or at least able to significantly affect the counterparty’s business activities. The difference in company size is only one factor; how much the counterparty depends on the relationship is also considered.
The Supreme Court of Korea has held that a “trading position” may be found where one party holds a relatively superior position, or at least a position that can significantly affect the counterparty’s business activities, and that whether it exists must be determined by considering all of the market conditions facing the parties, the overall gap in business capacity between them, and the characteristics of the goods or services traded and of the trading relationship (Supreme Court of Korea, September 10, 2015, 2012Du18325). The 2026 decision applied the same standard (Supreme Court of Korea, October 27, 2026, 2026Du31449).
A golf club and its weekday members: high dependence supports a superior position
In a case where a members-only golf club changed its rules to the disadvantage of weekday members, the lower court found that the members depended heavily on the club. The club effectively controlled information about course use and the power to allocate course bookings; the cost of memberships made it hard to hold several; and members playing at other clubs did not get priority booking or discounted fees. Adding that members who withdrew could not easily buy a comparable weekday membership elsewhere with the refunded entrance fee, the lower court concluded that the club held a relatively superior position over its weekday members. The Supreme Court agreed with that conclusion (Supreme Court of Korea, September 10, 2015, 2012Du18325). The case was nevertheless reversed for another reason (see section 4).
The 2026 case: the difficulty of replacing the components
In the 2026 case, the lower court recognized the suppliers’ superior bargaining position on grounds including that the smart device manufacturer would need considerable time and money to replace the suppliers’ components with others, and the Supreme Court accepted that finding in light of the difficulty of replacing the components (Supreme Court of Korea, October 27, 2026, 2026Du31449). The published summary does not compare the size or sales of the suppliers and the manufacturer. What the courts relied on was a feature of the trading relationship: how hard it was to move away from those components.
Is every disadvantageous term an “imposition of disadvantages”?
No. A term that is somewhat disadvantageous to the counterparty is not enough. The business must have unfairly used its trading position to a degree comparable to forced purchase, coerced provision of benefits or forced sales targets.
The Enforcement Decree defines imposition of disadvantages as, by methods other than forced purchase, coerced provision of benefits and forced sales targets, “setting or changing trading terms to the counterparty’s disadvantage, or imposing disadvantages on it in the course of performance” (Supreme Court of Korea, October 27, 2026, 2026Du31449). The Supreme Court has held that, for this type, it is not enough that the conduct is somewhat disadvantageous to the counterparty; it must be found that one party unfairly used its trading position to set or change the trading terms, or to impose disadvantages in performing them, to a degree that can be equated with forced purchase, coerced provision of benefits or forced sales targets, and that this, in light of normal trade practices, unfairly disadvantaged the counterparty and is likely to impede fair trade (Supreme Court of Korea, June 25, 2020, 2017Du37604; Supreme Court of Korea, October 27, 2026, 2026Du31449).
A TV home shopping operator steering viewers to mobile orders: not an imposition of disadvantages
A TV home shopping operator contracted with 112 suppliers between March and September 2014. For sales through the TV broadcast, it charged a fee combining a fixed amount and a percentage of sales; for mobile sales, only a percentage fee; and during broadcasts it encouraged viewers to order by mobile. The lower court held that this was not an imposition of disadvantages, because mobile sales could not be said to be always worse for suppliers than TV sales, consumers who decide to buy because of the discounts and reward points add to suppliers’ sales (and there were signs that this happened), and suppliers knew or could expect that mobile orders would be promoted on air. The Supreme Court found no error in that judgment (Supreme Court of Korea, June 25, 2020, 2017Du37604).
In the same decision, failing to deliver signed written contracts on time and making suppliers bear 99.8% of sales promotion costs were found to violate Korea’s Large-Scale Retail Business Act (Act on Fair Transactions in Large-Scale Retail Business) (Supreme Court of Korea, June 25, 2020, 2017Du37604). Within the same trading relationship, the courts assessed each practice separately.
How do Korean courts decide whether the position was used “unfairly”?
They consider the market and trading conditions, the gap in business capacity between the companies, the characteristics of the goods, the intent, purpose, effect and specific form of the conduct, the degree of the superior position, and the nature and extent of the counterparty’s disadvantage. The question is whether the conduct departs from normal trade practices and is likely to impede fair trade.
The Supreme Court has held that whether a trading position was unfairly used must be decided by determining whether, in light of the market and trading conditions facing the parties, the overall gap in business capacity between them, the characteristics of the goods or services traded, the intent, purpose, effect, impact and specific form of the conduct, the degree of the enterpriser’s superior position in the market, and the nature and extent of the disadvantage suffered by the counterparty, the conduct departs from normal trade practices and is likely to impede fair trade (Supreme Court of Korea, March 27, 2014, 2012Du5589). The 2026 decision cited that decision and stated the same standard (Supreme Court of Korea, October 27, 2026, 2026Du31449).
Requests to buy advertising space: complying does not make it coercion
In the pay TV market, a business that could significantly affect the business activities of nine multiple program providers (MPPs) asked them, between February 2007 and September 2008, to buy advertising space in a magazine it published, and they did. The business therefore had a trading position. Even so, the lower court held that forced purchase was not established, noting among other things that the MPPs’ business capacity was not vastly different from the plaintiff’s, that MPPs that declined the request suffered no disadvantage, and that the plaintiff passed all of the advertising fees on to an advertising agency and gained almost nothing. The Supreme Court upheld that judgment (Supreme Court of Korea, March 27, 2014, 2012Du5589). It stated that “forcing” a purchase includes creating an objective situation in which the counterparty cannot avoid purchasing, and found no error in the lower court’s conclusion that the evidence was insufficient to show that such a situation had been created (Supreme Court of Korea, March 27, 2014, 2012Du5589).
When the counterparty is a consumer, a connection to the trading order is also required
In the golf club case discussed above, the lower court treated as an imposition of disadvantages the club’s decision to shorten weekday members’ membership term from five years to one, replace automatic renewal with renewal after review, and introduce a non-refundable annual fee of KRW 3 million. The Supreme Court held that where the counterparty to an abuse of trading position is not a competitor or an enterpriser but a general consumer, it is appropriate to interpret the conduct as likely to impede fair trade only where a connection to the trading order is found, for example because it may harm an unspecified large number of consumers or similar violations may occur continuously and repeatedly, and it reversed the lower court (Supreme Court of Korea, September 10, 2015, 2012Du18325). The changes could be seen as somewhat disadvantageous to weekday members, but no connection to the trading order was found.
The 2026 case involved a transaction between businesses: parts suppliers and a manufacturer.
Which sales are used to calculate the administrative surcharge?
The base is the sales of the “relevant goods or services” sold during the period of the violation. Which goods are relevant is decided case by case, by looking at the content of the violation and the goods it affected.
The current Act allows the KFTC to impose, for unfair trade practices including abuse of a superior bargaining position (unfair support is dealt with separately), a surcharge of up to 4% of the sales prescribed by Presidential Decree, or up to KRW 1 billion where there are no sales or in similar cases (Article 50(1)). The Enforcement Decree defines those sales as the sales of the relevant goods or services the violator sold in a particular line of business during the period of the violation, and calls them “relevant sales.” Where the violation concerns the purchase of goods or services, the purchase amount is treated as the relevant sales (Enforcement Decree, Articles 56(1) and 13(1)). Former Article 24-2 of the Act and former Article 61(1) and [Appended Table 2] of the Enforcement Decree, which applied in the 2026 case, also used the sales of the relevant goods or services as the base (Supreme Court of Korea, October 27, 2026, 2026Du31449).
The Supreme Court has held that the scope of the relevant goods or services, on which the calculation of sales is based, must be determined individually and specifically by considering the content of the violation, the kind, nature, use and substitutability of the goods or services directly or indirectly affected by the violation, and the trading area, counterparties and trading stage (Supreme Court of Korea, September 26, 2019, 2014Du15047). The 2026 decision cited that decision and stated the same standard (Supreme Court of Korea, October 27, 2026, 2026Du31449).
Inflated handset prices: mobile service fees became relevant sales
In another case, a mobile carrier worked with handset manufacturers to inflate the supply or factory prices of handsets, creating a pool of funds for subsidies, and then lured consumers into its mobile service by making them believe they were getting expensive handsets at a large discount (inducing customers by deception). The KFTC treated as relevant sales the mobile service fees paid by consumers who bought the handsets concerned. The lower court found that this calculation was not arbitrary or unreasonable, and the Supreme Court upheld it (Supreme Court of Korea, September 26, 2019, 2014Du15047). Even though the violation concerned handset prices, the sales of a service affected by it could be included in the relevant sales.
The 2026 case: sales of components bought under the commitments were included
In the 2026 case, the lower court held that the sales of components the manufacturer bought under the minimum purchase commitments could be included in the relevant sales, and the Supreme Court found that conclusion correct as well (Supreme Court of Korea, October 27, 2026, 2026Du31449).
What did the parts suppliers do in the 2026 case?
They made the manufacturer sign long-term agreements by stopping the supply of components and so threatening its production. The agreements contained minimum purchase and shortfall compensation commitments.
According to the summary published by the Supreme Court, the plaintiffs, suppliers of smart device components, in their dealings with a smart device manufacturer halted the following four things and thereby “forced the conclusion of long-term agreements (LTAs) by threatening the smart device manufacturer’s production of smart devices” (Supreme Court of Korea, October 27, 2026, 2026Du31449):
- Approval of the manufacturer’s purchase orders for components
- Shipment of components
- Technical support
- Production
The resulting long-term agreements required the manufacturer to buy at least a certain amount of components from the plaintiffs and, if its purchases fell short of the agreed amount, to compensate the difference. The KFTC found that the plaintiffs’ conduct in making the manufacturer sign the agreements by means of supply suspension and similar measures was an unfair trade practice in the form of abuse of a superior bargaining position, and issued a corrective order and an order to pay an administrative surcharge. The plaintiffs sued to cancel them (Supreme Court of Korea, October 27, 2026, 2026Du31449).
The applicable law was former Article 23(1)(iv) of the Monopoly Regulation and Fair Trade Act and [Appended Table 1-2], item 6(d) (imposition of disadvantages) of its Enforcement Decree as in force at the time (Supreme Court of Korea, October 27, 2026, 2026Du31449).
Why did the courts reject the suppliers’ arguments?
The lower court’s findings were upheld on all four issues: trading position, disadvantage, unfairness and relevant sales. The Supreme Court held that the lower court had not misunderstood the law and dismissed all of the plaintiffs’ appeals (Supreme Court of Korea, October 27, 2026, 2026Du31449).
| Issue | What the courts relied on | Result |
|---|---|---|
| Trading position | The manufacturer would need considerable time and money to replace the plaintiffs’ components with others | Found |
| Disadvantageous terms | The minimum purchase and shortfall compensation commitments restricted the manufacturer’s choice of components; plans to adopt competitors’ components were canceled or scaled back, or the manufacturer had to buy the plaintiffs’ components in advance | Found |
| Unfairness | The agreements were forced through the unusual method of halting the supply of components; competitors’ trading opportunities were also restricted | Found |
| Relevant sales | Sales of components the manufacturer bought under the commitments | May be included |
The summary describes the Supreme Court’s reasoning as follows: the lower court did not err in law in recognizing the plaintiffs’ trading position in light of the difficulty of replacing the components, in finding that the minimum purchase and shortfall compensation commitments were trading terms disadvantageous to the counterparty, and in finding the violation unfair given circumstances such as forcing the conclusion of the agreements through supply suspension; the lower court was also correct in holding that the sales of components bought under the commitments could be included in the relevant sales (Supreme Court of Korea, October 27, 2026, 2026Du31449).
What the decision said, and what it did not
- What it said: The Supreme Court found no error in any of the lower court’s conclusions in this case: that the suppliers had a trading position because the components were hard to replace, that the minimum purchase and shortfall compensation commitments were disadvantageous trading terms, that the violation was unfair given circumstances such as forcing the agreements through supply suspension, and that sales of components bought under the commitments could be included in the relevant sales.
- What it did not say: It did not hold that long-term agreements or minimum purchase commitments are always unlawful. The courts relied on a combination of facts: coercion through supply suspension, the restriction of the manufacturer’s choice of components, the cancellation or scaling back of plans to adopt competing components, and the restriction of competitors’ trading opportunities.
- The published summary does not state the grounds the plaintiffs raised on appeal or the amount of the surcharge. We will update this article when the full text is released.
What should suppliers and buyers of components check?
Suppliers: do not use supply suspension as a bargaining tool
- Do not use halts in purchase order approvals, shipments, technical support or production to pressure a counterparty into signing a contract. The courts described this as the “unusual method of halting the supply of components” and relied on it to find the conduct unfair (Supreme Court of Korea, October 27, 2026, 2026Du31449).
- A trading position is assessed by looking not only at company size but also at the characteristics of the goods and of the trading relationship (Supreme Court of Korea, September 10, 2015, 2012Du18325). In the 2026 case, too, the courts relied on the difficulty of replacing the components (Supreme Court of Korea, October 27, 2026, 2026Du31449). If you supply components or technology that are hard to replace, review your contract terms on the assumption that you may hold a superior bargaining position.
- If you include minimum purchase or shortfall compensation clauses, assess how they affect the counterparty’s choice of components and its adoption of competing products, and keep negotiation records showing what the counterparty received in exchange for agreeing to them. This is not a requirement set by the decision, but unfairness is assessed by looking at the intent, purpose and effect of the conduct and the nature and extent of the counterparty’s disadvantage (Supreme Court of Korea, March 27, 2014, 2012Du5589; Supreme Court of Korea, June 25, 2020, 2017Du37604).
Buyers: keep a record of the pressure and the harm
- Preserve emails and minutes recording refusals to approve orders, notices halting shipments or technical support, and demands to sign a contract. Coercion through supply suspension was the first circumstance the courts cited to find the conduct unfair (Supreme Court of Korea, October 27, 2026, 2026Du31449).
- Document the time and cost needed to switch to other components. That was the basis for finding a trading position (Supreme Court of Korea, October 27, 2026, 2026Du31449).
- Record plans to adopt competing components that were canceled or reduced because of the long-term agreement, and any components bought in advance. Those were the disadvantages the courts identified (Supreme Court of Korea, October 27, 2026, 2026Du31449).
- There are three avenues. You may file a report with the KFTC (Article 80(2) of the Monopoly Regulation and Fair Trade Act); you may ask the violating business to stop or prevent the infringement, including by filing a lawsuit (Article 108(1) and (2)); and you may claim damages (Article 109(1)). The violating business is liable for damages unless it proves that it acted without intent or negligence. The provision allowing damages of up to three times the actual loss, however, applies to unfair concerted practices (Article 40) and certain other violations, not to abuse of a superior bargaining position (Article 109(2)).
- The KFTC may not order corrective measures or impose a surcharge once seven years have passed since the violation ended (Article 80(4)). Keep records for longer than that, even after the contract ends.
For a case in which a franchisor forced franchisees to buy goods, see Can a Franchisor Force Franchisees to Purchase New Menu Items? FTC Sanctions in South Korea.
What does this mean for foreign companies in IFEZ?
Foreign-invested manufacturers, component suppliers and buyers in the Incheon Free Economic Zone (IFEZ), including Songdo International Business District, Cheongna International City and Yeongjong International City, often sit on one side of exactly this kind of supply relationship with Korean counterparties.
- If your company supplies a component or technology that a Korean customer cannot easily replace, the courts may treat you as holding a superior bargaining position in that relationship, because the test looks at the characteristics of the goods and of the trading relationship, not only at company size (Supreme Court of Korea, September 10, 2015, 2012Du18325; Supreme Court of Korea, October 27, 2026, 2026Du31449). Supply suspension should not be used as leverage in contract negotiations (Supreme Court of Korea, October 27, 2026, 2026Du31449).
- If your company buys such components, the facts the courts relied on in 2026 are the ones to document: the pressure applied, the cost of switching, and the competing components you dropped because of the agreement (Supreme Court of Korea, October 27, 2026, 2026Du31449).
- Minimum purchase commitments are common in supply agreements and were not held unlawful in themselves. What mattered was how the agreement was obtained and what it did to the buyer’s choices (Supreme Court of Korea, October 27, 2026, 2026Du31449).
For help in English with a KFTC matter or a supply dispute in IFEZ, see English-Speaking Lawyer in Incheon Free Economic Zone.
Frequently asked questions
Q. How is abuse of a superior bargaining position different from abuse of a market-dominant position?
A. Abuse of a market-dominant position (Article 5 of the Monopoly Regulation and Fair Trade Act) applies only to market-dominant enterprisers, which hold a market position that lets them determine, maintain or change prices, quantities, quality or other trading terms in a particular line of business (Article 2(iii)). Abuse of a superior bargaining position (Article 45(1)(vi)) applies to enterprisers in general, and it can arise whenever a business is relatively superior to a particular counterparty or can significantly affect that counterparty’s business activities (Supreme Court of Korea, September 10, 2015, 2012Du18325).
Q. Does a business need to be larger than its counterparty to have a superior bargaining position?
A. Size alone does not decide it. The Supreme Court of Korea looks at market conditions, the overall gap in business capacity, and the characteristics of the goods and of the trading relationship (Supreme Court of Korea, September 10, 2015, 2012Du18325). In the 2026 case, the courts found that the parts suppliers held a superior bargaining position because the manufacturer would need considerable time and money to replace their components with others (Supreme Court of Korea, October 27, 2026, 2026Du31449). The summary published by the Supreme Court does not compare the size of the companies.
Q. Is a minimum purchase clause in a long-term agreement illegal in itself?
A. The Supreme Court did not say so. In the 2026 case, the courts treated as a disadvantage the fact that the minimum purchase and shortfall compensation commitments restricted the manufacturer’s choice of components, led it to cancel or scale back plans to adopt competitors’ components, or forced it to buy components in advance, and they relied on the unusual method of halting the supply of components to force the agreements, among other circumstances, to find the conduct unfair (Supreme Court of Korea, October 27, 2026, 2026Du31449). A term that is merely somewhat disadvantageous to the counterparty is not enough (Supreme Court of Korea, June 25, 2020, 2017Du37604).
Q. If the counterparty signed the contract, is there still a problem?
A. Signing does not settle the question. The manufacturer in the 2026 case did sign the long-term agreements, but the courts found that the suppliers forced it to do so by halting order approvals, shipments, technical support and production (Supreme Court of Korea, October 27, 2026, 2026Du31449). By contrast, in a case where counterparties bought advertising space at a business’s request, the Supreme Court upheld the lower court’s finding that the evidence was insufficient to show that the business had created a situation in which they could not avoid buying (Supreme Court of Korea, March 27, 2014, 2012Du5589).
Q. Can changing terms to the disadvantage of consumers be an abuse of a superior bargaining position?
A. An additional requirement applies. The Supreme Court of Korea held that where the counterparty is a general consumer rather than a competitor or another business, the conduct is likely to impede fair trade only if it is connected to the trading order, for example because it may harm an unspecified large number of consumers or similar violations may occur continuously and repeatedly. On that basis, it set aside a lower court judgment that had upheld KFTC sanctions against a golf club that shortened weekday members’ membership terms and introduced a non-refundable annual fee (Supreme Court of Korea, September 10, 2015, 2012Du18325).
Q. How is the administrative surcharge for abuse of a superior bargaining position calculated?
A. Under the current Act, the surcharge may not exceed 4% of the sales of the relevant goods or services sold in a particular line of business during the period of the violation (relevant sales) (Article 50(1) of the Monopoly Regulation and Fair Trade Act; Articles 56(1) and 13(1) of its Enforcement Decree). The scope of the relevant goods is decided case by case, taking into account the goods directly or indirectly affected by the violation (Supreme Court of Korea, September 26, 2019, 2014Du15047). In the 2026 case, the courts held that sales of the components the manufacturer bought under the minimum purchase commitments could be included in the relevant sales (Supreme Court of Korea, October 27, 2026, 2026Du31449).
Q. What can a company that suffered harm claim directly, apart from filing a report with the KFTC?
A. It may ask the violating business to stop or prevent the infringement, including by filing a lawsuit (Article 108(1) and (2) of the Monopoly Regulation and Fair Trade Act), and it may claim damages (Article 109(1)). The violating business is liable for damages unless it proves that it acted without intent or negligence. The provision allowing damages of up to three times the actual loss applies to unfair concerted practices and certain other violations, not to abuse of a superior bargaining position (Article 109(2)).
Q. We are a foreign company in IFEZ that buys or supplies components in South Korea. What should we take from this decision?
A. The decision gives both sides of a supply relationship a checklist. Suppliers of components that are hard to replace should not use halts in order approvals, shipments, technical support or production as leverage to obtain a contract, which the courts treated as a basis for unfairness (Supreme Court of Korea, October 27, 2026, 2026Du31449). Buyers should keep records of any such pressure, of the time and cost needed to switch to other components, and of competing components they dropped because of the agreement, because those were the facts the courts relied on (Supreme Court of Korea, October 27, 2026, 2026Du31449).
This article summarizes Korean court decisions and statutes on abuse of a superior bargaining position, based on the summary of the 2026 decision published by the Supreme Court of Korea, published Supreme Court judgments and the statutes, and is not legal advice for any particular case. Quotations from Korean judgments and statutes are our English translations. Because the full text of the 2026 decision has not yet been released, the article covers only what appears in the summary. If a supplier’s halt in supply or one-sided contract terms is affecting your business, please consult Atlas Legal.
