Siemens set for December verdict in South Korean dominance abuse appeal

29 October 2019 8:40am

28 October 2019, by Choi Hyung-jo

German conglomerate Siemens’ appeal against an antitrust case decision by South Korea's competition regulator will produce a verdict before the end of the year, MLex has learned.

It is understood that the Seoul High Court has tentatively set Dec. 12 as the date for an announcement of its decision in the legal battle between Siemens' local affiliates and the Korea Fair Trade Commission.

Siemens, Siemens Healthcare and Siemens Healthineers were last year fined a combined 6.2 billion won ($5.3 million) by the KFTC and handed corrective orders for abusing their dominance in the South Korean aftermarket for computed tomography and magnetic resonance imaging scanners. It was the first case in which the KFTC sanctioned a company for dominance abuses in an aftermarket.

The regulator found that the companies had abused their dominant position in the markets for CT and MRI scanners, which are key pieces of medical equipment used widely in hospitals — markets in which, according to the regulator, they had the largest share for four consecutive years, from 2012 to 2015.

The companies allegedly discriminated against hospitals by imposing conditions in their terms of use for software critical to the maintenance of CT and MRI scanners if hospitals used third-party maintenance providers. The KFTC said that as a result of that discrimination, some independent maintenance companies had been driven out of the markets for those services. The companies had also sent notices to hospitals exaggerating potential intellectual property rights issues that could arise from dealing with third-party maintenance companies, the regulator said.

Siemens, Siemens Healthcare and Siemens Healthineers expressed their intent to challenge the decision immediately because medical equipment maintenance services are considered intellectual property rights, and South Korean law guarantees the right of IP owners to receive licensing fees. They filed their appeal in April 2018, leading to litigation that lasted for more than a year.