Strong Opposition from the Bar Association and Seoul Bar Association to the Fair Trade Commission's Decision That "Rotok Usage Restriction Is Illegal"

Advance Notice of Legal Actions Including Administrative Litigation and Jurisdictional Dispute Adjudication
Fair Trade Commission: "Bar Association and Seoul Bar Association Violate Fair Trade Act and Labeling Advertising Act"
Correction Orders to 'Cease and Refrain' and Imposition of 1 Billion KRW Each in Fines

The Korean Bar Association and the Seoul Bar Association strongly opposed the Fair Trade Commission's decision on the 23rd that "restricting advertisements by affiliated lawyers using legal platforms such as LawTalk is illegal," and announced plans to file lawsuits.

On the same day, immediately after the Fair Trade Commission issued corrective orders to stop "restricting advertisements by constituent businesses" and imposed fines of 1 billion KRW each, the Bar Association and the Seoul Bar Association released statements expressing their intention to take all measures, including administrative lawsuits seeking cancellation of the Fair Trade Commission's disposition and petitions for adjudication of authority disputes.

Seoul Seocho-dong, Korean Bar Association.

Korean Bar Association, Seoul Bar Association, and Incoming President Announce Objection

In the afternoon, the Bar Association issued a commentary titled "The Fair Trade Commission's sanction against the Korean Bar Association is a clear overreach, and the Korean Bar Association will correct this through proper judicial procedures," stating, "The Bar Association deeply regrets the unfair imposition of fines by the Fair Trade Commission, which unjustly penalized procedural acts without authority, and will immediately file administrative lawsuits to correct this and clarify responsibility."

The Bar Association further argued, "The establishment of lawyer advertising regulations is a regulatory authority of the Korean Bar Association based on the Attorney-at-Law Act, and the disciplinary authority over lawyers is a public administrative task for maintaining the public nature of lawyers and sound order in client acceptance. This authority is entrusted to the Korean Bar Association under the Attorney-at-Law Act, making the Korean Bar Association a public official entrusted with duties. Since restricting the fundamental rights of lawyers is an exercise of public authority, it is obvious that the Fair Trade Commission has no jurisdiction to judge this."

Kim Young-hoon, the incoming president whose term begins on the 27th, issued a separate official statement titled "Strong Condemnation of the Fair Trade Commission's Corrective Order and Fine Imposition on the Korean Bar Association," emphasizing, "The Fair Trade Commission's decision represents a state agency, which should regulate market order, forgetting its role and becoming a tool for private companies to invade the legal market. The Fair Trade Commission regulating the constitutionally guaranteed legal profession has the effect of infringing on the basic rights of citizens guaranteed by the Constitution."

Kim also stated, "It is questionable whether the Bar Association, a public organization, is even a business operator or business association subject to regulation by the Fair Trade Commission, a state agency regulating market order under the Fair Trade Act. Moreover, the disciplinary authority over lawyer members, which forms the basis of this fine imposition, is a power lawfully exercised by the Bar Association through due process with the consensus of lawyers and is not subject to Fair Trade Commission regulation."

The Seoul Bar Association issued a statement titled "Strong Condemnation of the Fair Trade Commission's Arbitrary Sanction Decision Ignoring the Rule of Law," stating, "Although the 'Regulations on Lawyer Advertising' established by the Bar Association clearly constitute an exercise of public authority and are not subject to the Fair Trade Commission's judgment, the Commission's decision contradicts existing precedents of the Constitutional Court and the Supreme Court. Therefore, the Seoul Bar Association strongly condemns the unfair sanction decision and will take all measures, including administrative lawsuits, to rectify the issue."

They added, "The Fair Trade Commission cites the Ministry of Justice's legal interpretation that 'LawTalk service is unlikely to violate the Attorney-at-Law Act' as the basis for this sanction decision, but this is merely an arbitrary and provisional judgment by a former Minister of Justice, who is not a judicial authority, and cannot be considered a hasty excuse for the sanction decision. Furthermore, the withdrawal from LawTalk service and disciplinary warnings are based on the amended advertising regulations, not the Attorney-at-Law Act, making the discussion fundamentally different."

Fair Trade Commission: "Unfair Restrictions on Constituent Businesses by Business Associations"… Violations of the Fair Trade Act and the Act on Labeling and Advertising

On the same day, the Fair Trade Commission announced that it decided to impose corrective orders to cease and prohibit acts restricting advertisements by constituent businesses, including demands for affiliated lawyers to stop using or withdraw from specific legal platform services, and to notify the corrective orders to the constituent businesses, along with fines of 1 billion KRW each. The 1 billion KRW is the maximum fine under the Fair Trade Act.

The Fair Trade Commission concluded that the Korean Bar Association and the Seoul Bar Association's restriction of lawyers' advertisements through legal platforms violated Article 51(1)(3) of the Fair Trade Act (Prohibited Acts by Business Associations: Restriction of Constituent Business Activities) and Article 6(1) of the Act on Labeling and Advertising (Prohibition of Restrictive Acts on Labeling and Advertising by Business Associations).

Article 6(1) of the Act on Labeling and Advertising states, "Business associations shall not restrict the labeling or advertising of businesses that have joined the association unless in accordance with laws and regulations."

In particular, the Fair Trade Commission clarified through this measure that the Korean Bar Association and the Seoul Bar Association's acts restricting advertisements by lawyers using legal platforms exceeded the authority delegated by relevant laws and constituted acts restricting competition in the relevant market, and thus do not qualify as lawful acts under the relevant laws.

Article 116 of the Fair Trade Act (Lawful Acts under Other Laws) stipulates, "This Act shall not apply to lawful acts performed by businesses or business associations under other laws."

Additionally, the proviso of Article 6(1) of the Act on Labeling and Advertising states, "However, this shall not apply if the Fair Trade Commission recognizes it as necessary to protect consumer interests or maintain fair trade order," thereby excluding the application of the advertising restriction clause under the Act on Labeling and Advertising.

The Fair Trade Commission judged, "The Korean Bar Association and the Seoul Bar Association demanded constituent businesses, who could freely decide whether to use legal platform services such as LawTalk, to withdraw from these services and warned of disciplinary action if not complied with. This effectively forced the prohibition of using these legal platform services, constituting an excessive restriction on the business activities of constituent businesses."

Furthermore, the Fair Trade Commission pointed out, "This act restricted advertisements, which are promotional means for lawyers in mutual competition to inform consumers about themselves, thereby limiting free competition among lawyers and restricting consumers' choice of lawyers using legal services."

The Fair Trade Commission noted, "The Ministry of Justice announced on August 24, 2021, a press release stating that 'LawTalk service does not violate the Attorney-at-Law Act.' Despite the Ministry of Justice's authoritative interpretation, which is the final authority on the Attorney-at-Law Act, the Bar Association continued to demand explanations and withdrawal from affiliated lawyers."

The Fair Trade Commission stated, "This measure is the first case to sanction a business association for restricting advertisements by demanding constituent businesses to prohibit or withdraw from using a specific platform. It is significant in that it detected and corrected acts restricting lawyers' free advertising activities through newly emerging legal platform services in the legal service market, thereby limiting consumers' choice."

They added, "In particular, the Fair Trade Commission clarified that acts exceeding the authority delegated by relevant laws and restricting competition in the relevant market do not qualify as lawful acts under the relevant laws."

Moreover, the Fair Trade Commission expressed, "Through this measure, competition among legal platforms in the legal service market, where information asymmetry is high, will be promoted, improving accessibility for consumers seeking legal services and expanding their choices."

They continued, "Going forward, the Fair Trade Commission plans to strengthen monitoring of acts by existing business associations that obstruct new platform entry and business activities in the service innovation platform sector to prevent recurrence of similar cases, and to impose strict sanctions upon detecting legal violations."

Ministry of Justice's 'LawTalk is Legal' Interpretation, Constitutional Court's 'Advertising Regulation' Unconstitutionality Ruling, and Fair Trade Commission's 'Violation' Judgment All Challenged

In 2021, the Bar Association amended related regulations to discipline affiliated lawyers who use legal platform services and subsequently notified lawyers registered with LawTalk that failure to withdraw would result in referral to the investigation committee.

The Ministry of Justice issued an authoritative interpretation in August of the same year stating that "LawTalk service does not violate the Attorney-at-Law Act," but the Bar Association's disciplinary committee sanctioned lawyers registered with LawTalk the following year. The Seoul Bar Association demanded withdrawal from LawTalk from its members even before the Bar Association's amended advertising regulations were implemented.

In May of last year, the Constitutional Court ruled unconstitutional key provisions such as Article 5(2)(1) of the lawyer advertising regulations created by the Bar Association to discipline lawyers registered with LawTalk. However, the Bar Association issued a commentary the day after the Constitutional Court's decision welcoming the constitutionality of the LawTalk membership prohibition advertising regulations and subsequently proceeded with disciplining lawyers registered with LawTalk.