The Korea Fair Trade Commission (KFTC) said on Monday that U.S.-based Apple’s South Korean unit Apple Korea vowed to inject 100 billion won ($84 million) worth of programs intended for users and mobile phone carriers.
The move came after Apple Korea decided to correct its alleged violations of the competition law.
KFTC said that the company would also share advertising costs with mobile carriers and would support small and medium-sized enterprises.
The Korea Fair Trade Commission recently investigated Apple Korea over claims that required SK Telecom Co., LG Uplus Corp., and KT Corp. to shoulder the cost of media advertisements and warranty service for iPhones.
The commission noted that Apple Korea passing advertisement costs only extract more profit from mobile carriers.
On June 4, Apple Korea applied for a consent order prompting the KFTC to create a provisional agreement following consultations. The order set off a procedure to discontinue an FTC case against Apple if the company willingly apply corrective measures.
Striving for Clear and Fair Practices
Under the deal, Apple would strive to operate clearly and fairly, improving procedures about advertising. The company would also remove a clause that requires mobile carriers to pay for warranty services.
Apple Korea vowed to donate 40 billion ($33.6 million) won for building an R&D facility for SMEs in the smartphone manufacturing industry.
Another 25 billion won ($21 million) would go to 10 percent discount promos on repairs and insurance service for consumers. The company would use the remaining 35 billion won ($29.4 million) for an educational and training center for IT professionals.
Song Sang-min, KFTC director-general in-charge of the issue, said that Apple Korea would enable sharing of advertising costs and in approving ads which would help ease the burden on mobile carriers. The company would set up a standard advertising cost that would allow the company and mobile carriers to discuss schemes on sharing such costs.
KFTC said it would gather opinions from relevant parties starting from August 25 to October 3, a period of 40 days. If stakeholders choose to accept the measures offered by Korean unit, the KFTC would finally endorse the provisional agreement.
In a statement, Apple vowed to deepen its relationships with its Korean business partners and consumers.
