Authorities may sanction Apple Korea which is accused of shouldering high costs onto Korean mobile carriers.
Korea’s telecommunications authority, the Fair Trade Commission (FTC), held its first plenary session today on whether to impose sanctions. Investigations were going on for 2 years to build a case.
Apple is accused of abusing its trading position by passing costs of advertising, retail store installations and product repair to three mobile carriers: LG U+, SK Telecom and KT.
Korean teleco official said, “Apple Korea ran TV commercials with its own budgets for a year after it released the iPhone in South Korea at the end of 2009. Then, the company started talks with domestic mobile carriers in 2011 about sharing the burden of advertising costs. I heard that the advertising expenses have amounted to at least 20 billion won (US$17.69 million) a year since then.”
If true then domestic carriers could have suffered losses of more than 160B KRW ($141.53M USD) in the span of 8 years. The other alleged product repair and store installation abuses are not figured into this number.
Domestic carriers are legally tight lipped out of mutual confidentiality agreements with Apple. This makes it hard for the carriers to testify against Apple Korea. Likewise, the larger US firm cites the agreements.
Apple Korea denies any misconduct.
