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In the recent 'BCG Preventive Vaccine' case, the two market dominant undertakings have gained unfair economic benefits by increasing the sales of high-priced products(B Vaccine) instead of supplying low-priced products(A Vaccine) with similar preventive function. Although the two product suppliers were in competition, they were able to control imports as a whole through subsidiaries that run the same family, so they were able to obtain exclusive profits by coordinating the release of vaccines. The KFTC concluded that such an act was to abuse the market, claiming that it would gain an unfair profit by coordinating the release of the product by taking advantage of the price difference from similar products in the same market. In this paper, the question of joint liability against violations has been raised by all participating enterprises that act as a single enterprise. The KFTC imposed sanctions only on those who “actually” manage the subsidies. However, the law is reasonable in terms of the effectiveness of the Act, although it is not implemented independently for businesses that enjoy exclusive profits under the Supply Control Act. Accordingly, laws and regulations shall be revised to ensure joint liability for such cases.

Ⅰ. Introduction
Market-dominant businesses that abuse their monopoly power to raise prices and control supplements which gain unjust profits are prohibited unless attributable to consumers. However, it is not easy to determine whether or not there is abuse of exploitation or take appropriate corrective action because the criteria for judgment are not clear. Above all, competition authorities may turn into price regulators. Accordingly, there are no cases of unfair supply control except for a few cases in 1998. The Korean Fair Trade Commission (KFTC) recently imposed sanctions on market-dominated companies who supplies BCG vaccines for profit.

Ⅱ. What are the issues?
Issue 1: In this case, ‘actor’ and ‘person who make unreasonable profits’ are different. However, as many affiliates regulate unfair supply as market-dominant operators, it is necessary to consider whether the KFTC’s deposition is appropriate or not. In order to determine whether they will become market-dominant operators, it is necessary to define the relevant markets for the α and the β vaccines they deal with as one market and define whether they will become a group of market-dominant operators.

Issue 2: The point is whether this act can consist of a supply control act. If the β vaccine has been supplied sufficiently even if the supply of α vaccine has decreased, is there still limited supplement? And does the act of controlling the release of one product and getting unjustifiable profits from the release of another product violate the MRFTA?

Issue 2: The bottom line is whether this act consists of supply management. Even if the supply of α vaccine decreases and β vaccine has been supplied sufficiently, are supplements limited? Also, is it a violation of the MRFTA to regulate the release of one product and to make unreasonable and unjustifiable profits from the release of another?

Issue 3: Although this case is officially different between "actors" and " those who gain the unjustifiable profits", it has substantial connections such as one person holds the same position of both companies as an executive. In that case, can the KFTC impose corrective order and fines on all related projects?

III. Case Brief
Korea strongly recommends BCG vaccinations for infants within four weeks of birth to prevent tuberculosis. Only intravenous vaccines (“α vaccine”) and percutaneous vaccines ("β vaccine") are required for inoculation. Currently, there is no alternative vaccine for BCG prevention, and both vaccines can only be taken once at the request of consumers. However, the two vaccines differ greatly in price, supply conditions and inoculation methods. α Vaccines cost approximately $2 per person, but are eligible for a free National Immunization Program (NIP) at national expense as a legal mandatory vaccine. Meanwhile, β vaccines require consumers to pay $25 or more. Company C, an affiliate of Company B, make both vaccines. In addition, the α vaccine is exclusively sold by Company A, another affiliate of Company B, and Company B exclusively sells the β vaccine.

From January to February 2017, Company A abruptly cancelled its import request that α vaccine to Company J in Japan through Company C, and finally notified the government that 20,000 α vaccines could not be imported (July 2017). As a result, the α vaccines were not inoculated since October 2017, when 20,000 imported α vaccines in 2016 were depleted. Accordingly, the South Korean government designated expensive β vaccines as interim NIPs until June 2018. And consumers no longer have to pay extra expenses, but the expenses came from the national treasury, and Company B’s sales increased rapidly to profit.

Direct supply management activities were carried out by Company A and C, but the resulting unjust economic benefits were attributed to Company B. The KFTC imposed approximately $800,000 (about 990 million won) fines on Company A, Company B and Company C respectively with ordering corrective measures stating such act as “an act with market abusive supply control performed by multiple affiliates as a single market-dominant business.”

IV. Relevant market and market dominant position
In this case, the most important factor in defining the relevant market is to determine whether it is reasonably interchangeable from perspective of the consumer when the price or condition of a particular product or service changes. In the case of α vaccine and β vaccine, it is hard to determine the replacement of demand based on the price because it is a medicine. Since α and β vaccines are vaccines that must be inoculated to prevent tuberculosis, there is no other alternative vaccine, and it can be inoculated at the discretion of consumers. Therefore, regardless of price differences or inoculation methods, BCG vaccines are similar in effect, so demand can be replaced. In this case, the KFTC defined the two vaccines as one 'BCG vaccine market' pursuant to the ATC (Anatomical Therapeutic Chemical) classification system. I think the KFTC’s view like this is correct.

In this case, Company A exclusively supplies α vaccine to South Korea and Company B exclusively supplies β vaccine to South Korea. Since there are only two vaccines in this market, each of them is recognized as a market-dominating operator. However, the current regulations do not confirm whether unfair supply management between companies with market power is constituted. Furthermore, it is not a matter of law whether the sanctions are subject to joint liability. Therefore, it is necessary to establish a theory that, due to substantial interrelationship, a single operator is responsible for violations.

V. Joint liability against violation
If it is difficult for an individual business operator to have an independent economic entity, such as conducting economic activities based on a single governance relationship or decision-making, can the individual business operator bear the burden of sanctions jointly?

A single economic identity is a relationship between parent companies, especially when the parent company wholly owns a subsidiary or when the subsidiary actually controls the act. A subsidiary holding a 100% interest in the parent company shall be deemed to be as single entity, even if the subsidiary is an independent and separate operator. Internal allocation of functions may also be considered a single operator if a particular company exerts significant influence on the management decisions of another company and the other company is forced to follow its instructions. In this case, the operators who cancelled the import are Company A and Company C, and are under actual control. Company B, which was separated from Company A in 2010, is the largest shareholder of Company C, which holds 54% of the shares, and two executives who also serve as mangers of both companies make important decisions to conduct business. If the relationship between the supply of β vaccine and the increase in zero-sum benefits of Company B is thought to be economically related as well as the supply of α vaccine, they are one economic entity and jointly liable for violations of the law.

However, the regulation that an affiliated company is regarded as a single business operator does not apply to administrative procedures, criminal penalties, or compensation for damages, as it adds up the equity interests of affiliated companies when they are recognized as controlling companies in the market or when the estimation clause applies. Under the current law, even if a number of businesses have committed a single violation jointly, they will be individually punished by corrective action and fins, and fines are “individual business operators.” In other words, it is possible impose sanctions on all operators due to the nature of fines, but it is also possible to impose fines in different amounts by calculating sales volume individually.

VI. Conclusion
This case is an economic benefit for operators that exclusively supply BCG vaccines, which has no choice but to stop supplying low-priced products and increase sales of high-priced products from competing affiliates. This is very unusual case of abuse of market dominance. The responsibility of these companies for violations is considered to be the same for multiple affiliates, but under current law, sanctions are imposed only on those companies that act on their own initiatives. Regarding corrective measures and fines, such as when multiple operators are recognized as one market-dominant business operator due to dominant abuse or collusion, it is necessary to clarify the basis for sanctions pursuant to laws and guidelines by clearly defining such measures.