Supreme Court: "Insufficient Proof of Collusion or Intent"... Acquittal Finalized in Vaccine Bid-Rigging Case

Indicted for Prearranging Winning Bidders and Bid Prices
Fines Imposed in First Trial, Complete Acquittal in Second
"Difficult to Recognize Substantive Competition Due to Supply Commitment Structure"
No Intent Found for Bid Obstruction or Fair Trade Act Violation
Supreme Court Dismisses Prosecutor's Appeal, Finalizes Acquittal

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The acquittal of pharmaceutical company executives and employees who were brought to trial on charges of collusion during the national immunization program bidding process has been finalized.

According to the legal community on January 7, the Supreme Court's Second Division (Presiding Justice Oh Kyungmi) dismissed the prosecution's appeal against executives and employees of SK Discovery, Boryung Biopharma, Green Cross, Yuhan Corporation, Kwangdong Pharmaceutical, and GlaxoSmithKline (GSK), who were indicted for violating the Fair Trade Act and obstructing bids, thereby upholding the lower court's acquittal.

They were accused of coordinating the winning bidders and bid prices in advance while participating in national immunization program bids, such as for the cervical cancer vaccine, ordered by the Public Procurement Service from 2016 to 2019. They were also accused of using certain wholesalers as decoys to hinder fair competition. In connection with this case, the Fair Trade Commission imposed a total fine of 40.9 billion won in 2023.

The first trial partially found them guilty and imposed fines on the corporations, but the appellate court found them not guilty on all counts. The appellate court determined that, given the structure of the vaccine bidding process, it was highly unlikely that a third-party company, not a joint distributor, would actually participate in the competition by obtaining a supply commitment from the manufacturer or importer. The court also found it difficult to conclude that there was a substantive competitive relationship between the joint distributors, the decoy companies, and other firms, or that there was intent to restrict competition or undermine the fairness of the bidding. Thus, neither the anti-competitive nature nor the intent of the concerted action at issue was recognized.

The Supreme Court reached the same conclusion. The Supreme Court stated, "In criminal trials, guilt can only be recognized if the charges are proven beyond a reasonable doubt," and dismissed the prosecutor's appeal, thereby finalizing the acquittal.