The Korea Fair Trade Commission (KFTC) imposed sanctions on Hyundai Motors and Kia
Motors for committing “discrimination in favor of affiliated companies” specified in
Appendix 1, “Types of and Criteria for Unfair Trade Practices”, related to Article 36(1) of the
Enforcement Decree and set forth in Article 23(1) subparagraph 1 of the Monopoly
Regulation and Fair Trade Act (MRFTA). Hyundai and Kia discriminated non-affiliated
capital companies by applying lower interest rate only to the customers of Hyundai Capital,
their affiliated company, after signing an exclusive installment interest settlement agreement
while Hyundai Motors raised a credit limit only for Hyundai M Card, a credit card issued by
Hyundai Card, another affiliated company, discriminating against rival credit card companies.
The issues in the present case include ① the scope of counterpart in the discriminatory
transaction for affiliated companies, ② determination criteria for subjective requirement of
“discriminatory treatment for affiliated companies”, and ③ how to interpret the necessity for
business operation as a reason to justify a discriminatory practice for affiliated companies.
There were conflicting positions over these issues. The Seoul High Court and the Supreme
Court held that the practice the KFTC decided to be violation of the law was not unlawful and
reversed the KFTC’s decision.
Regulating discrimination in favor of affiliated companies as one of the unfair trade
practices is unique only existing in Korea, reflecting its economic situation led by large
enterprises. This implies that it is necessary to lay down a standard for the universal
application of this regulation. In this regard, this case is meaningful as the standard was
established to determine the unlawfulness of discrimination in favor of affiliated companies
The Korea Fair Trade Commission (KFTC) imposed sanctions on Hyundai Motors and Kia
Motors for committing “discrimination in favor of affiliated companies” specified in
Appendix 1, “Types of and Criteria for Unfair Trade Practices”, related to Article 36(1) of the
Enforcement Decree and set forth in Article 23(1) subparagraph 1 of the Monopoly
Regulation and Fair Trade Act (MRFTA). Hyundai and Kia discriminated non-affiliated
capital companies by applying lower interest rate only to the customers of Hyundai Capital,
their affiliated company, after signing an exclusive installment interest settlement agreement
while Hyundai Motors raised a credit limit only for Hyundai M Card, a credit card issued by
Hyundai Card, another affiliated company, discriminating against rival credit card companies.
The issues in the present case include ① the scope of counterpart in the discriminatory
transaction for affiliated companies, ② determination criteria for subjective requirement of
“discriminatory treatment for affiliated companies”, and ③ how to interpret the necessity for
business operation as a reason to justify a discriminatory practice for affiliated companies.
There were conflicting positions over these issues. The Seoul High Court and the Supreme
Court held that the practice the KFTC decided to be violation of the law was not unlawful and
reversed the KFTC’s decision.
Regulating discrimination in favor of affiliated companies as one of the unfair trade
practices is unique only existing in Korea, reflecting its economic situation led by large
enterprises. This implies that it is necessary to lay down a standard for the universal
application of this regulation. In this regard, this case is meaningful as the standard was
established to determine the unlawfulness of discrimination in favor of affiliated companies
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