Successfully Represented Interested Third-party Participants in GTT Abuse of Dominance Case

Lee & Ko’s Antitrust & Competition Group (“Lee & Ko”) successfully represented three major Korean shipbuilding companies as interested third-parties in the Korea Fair Trade Commission’s (“KFTC”) investigation/deliberation and in the subsequent administrative lawsuit opposite Gaztransport & Technigaz SA (“GTT”). GTT, the exclusive holder of key patents in technology (“Licenses”) for manufacturing/constructing membrane storage tanks used on liquefied natural gas carriers was suspected of tying the sale of Licenses to additional engineering services (“Services”). The KFTC found GTT was in violation of the Monopoly Regulation and Fair Trade Agreement (“MRFTA”) by tying Services into contracts for Licenses used in manufacturing/constructing membrane storage tanks for LNG Carriers and was issued corrective orders and an administrative fine of KRW 12.8 billion for abuse of dominance (i.e., interference with business activities by imposing unfair disadvantages) and unfair trade practices (i.e., tying).

In the administrative lawsuit, the Seoul High Court and the Supreme Court of Korea (“Supreme Court”) ruled in favor of the KFTC’s decision accepting Lee & Ko’s arguments that: (1) GTT’s actions were aimed at maintaining its dominant position in the Licenses and Services markets for manufacturing/constructing membrane storage tanks used on LNG Carriers, and such actions cannot be regarded as the legitimate exercise of intellectual property rights; (2) in consideration of neighboring markets and GTT’s past trade practices, its Licenses and Services can be sold separately; (3) even though Major Shipbuilders have the ability to perform all or part of the Services independently because of their experience in shipbuilding, GTT restricted new entrants in the Services market by tying the Licenses to the Services; and (4) as the purpose of the KFTC’s corrective orders is not to prohibit GTT from offering its Services, but to provide consumers with the right to choose their Services provider, the KFTC’s decision is sound based on the principles of market competition.