The Supreme Court ruled that the increase in Hyundai Capital’s market share after the
installment interest rate cut was insufficient to prove that the primary purpose of such
conduct was to restrict competition in the market and strengthen the concentrated
economic power of the business group on the following grounds:
① The fact that Hyundai-Kia Motors signed an auto installment contract only with
Hyundai Capital, not with other non-affiliated financing companies, could not be
seen as an act with the intent of placing its affiliated company in a favorable
position, considering transaction cost reduction, trade secret confidentiality and
industry practice (other automakers had an auto installment contract with
particular financing companies).
② Hyundai-Kia Motors set its interest rate after taking account of reduced interest
rate for car buyers paying with cash and the proportion of 24-month and 36-
month installment plans.
③ At the time of installment interest rate cut, many criticized that the interest rates
on auto installment loans were too high (prior to the present case, Hyundai
Capital paid settlement interest to Hyundai-Kia Motors), and Hyundai-Kia
Motors had to be prepared to respond to a possible installment interest rate cut by
then its competitor, GM-Daewoo.