Two bar associations did not violate antitrust rules by restricting members from joining legal counselling platform LawTalk, a Korean court has held in a decision that could impact the broader legal technology sector.
The Seoul High Court on Thursday cancelled 2 billion won (€1.3 million) in fines and corrective orders issued to the Korean Bar Association and Seoul Bar Association, finding that the associations have “considerable discretion” when determining the scope of legal advertising, given the highly public and ethical nature of the legal profession.
In February 2023, Korea’s Fair Trade Commission sanctioned the associations after finding the companies breached competition law by prohibiting members from advertising their services on an online platform that connects users with attorneys.
At the time, the watchdog said it assessed whether the conduct was exempt from competition scrutiny under the Attorney-at-Law Act, but found the statute explicitly allows lawyers to advertise using various channels.
But chief judge Jung Joon-young disagreed with that conclusion, finding that flexible regulations are necessary to respond to changes in the market, such as advancements in legal technology – and that legal tech falls within the scope of the Attorney-at-Law Act, which is aimed at protecting consumers in legal matters.
Since there were no procedural defects in the enactment of the restrictions by the bar associations, the conduct at issue is exempt from Korea’s antitrust statute, the Seoul High Court concluded.
The KFTC was contacted for comment on whether they will appeal the decision to the Supreme Court.
Lee & Ko partner Hwan Jeong, counsel to both bar associations, said the judgment could support cases involving the regulation of emerging technology by professional associations in other sectors, especially if there is a specific statute regulating workers and the industry demands high ethical standards to protect public interest.
In a statement on Friday the KBA said the ruling will enable it to properly manage the quality of legal services and monitor developments in the legal tech segment of the market, including artificial intelligence.
Korea University professor Hwang Lee said the decision came as quite a surprise in domestic antitrust circles, because most authoritative opinions by government bodies – including the KFTC and Department of Justice – believed that competition rules would apply to the conduct.
While it is highly likely that the Supreme Court will now review the decision, if it upholds the Seoul High Court’s judgment “the life of the legal tech industry will be seriously threatened,” Lee said.
He noted that the same court also held in February that the Ministry of Oceans and Fisheries has sole jurisdiction over collusive conduct in the shipping sector, putting the KFTC’s €67 million cartel fines against 23 companies at risk.
Lee voiced concerns that such court decisions could signal that there are broad exceptions to the antitrust laws, which contradicts strong settled case law that such exceptions be kept very narrow.
Counsel to the Korean Bar Association and Seoul Bar Association
Lee & Ko
Partner Hwan Jeong in Seoul
