Korea FTC Investigating Apple Over Unfair Mobile Carrier Contracts

[MacRumors]

South Korea's Fair Trade Commission (FTC) is investigating "some matters" relating to Apple's business practices in the country, according to a Reuters report this morning.

The comment was made Tuesday by the FTC chairman Jeong Jae-chan during a parliamentary hearing, but he declined to elaborate when asked to do so by a South Korean lawmaker.

Last week, the Korea Times cited sources tying an upcoming FTC investigation to the terms of Apple's marketing contracts with local mobile carriers. Sources said Apple was suspected of pressing carriers into buying a minimum volume of promotional iPhones and sharing the burden of repair costs.

"The Fair Trade Commission (FTC) is investigating mobile carriers over the exact terms of their contracts with Apple, and Apple Korea will also be looked into soon," said the source.

Apple has faced criticism over its business practices in the country before. In April, the FTC ordered the company to change unfair provisions in its contracts with certified repair service partners which stipulated that the firms could not file lawsuits against Apple within a year after any dispute.

The repair service partners were seen to have little choice but to agree with the terms, due to the market power of Apple's iPhones. Apple complied with the FTC order and changed the contracts.

In 2015, the FTC also ordered Apple to allow customers refunds for repair services.

Sources speculate that the latest investigation may result in the FTC fining the company and urging it to revise its contracts with mobile carriers if similar unfair terms are discovered.

South Korea has three major mobile carriers competing for subscribers, but offer few subsidies for contracts that include iPhone handsets. Contracts for Android-based handsets on the other hand offer a range of subsidies to customers.

"As Apple does not allow mobile carriers to offer subsidies for iPhones, they may have been forced to pay for Apple Korea's marketing activities," said another source speaking to Korea Times.

Article Link: Korea FTC Investigating Apple Over Unfair Mobile Carrier Contracts

 

[MH01]

Will have to see how this plays out. Was never a fan of Apple only being available on O2 when it launched in the UK.

 

[smacrumon]

Apple's rotten core. Why on earth would Apple, with its huge margins, its sales model, play at this game of trying to extract even more coin through completely unreasonable terms and contracts. Shareholders need to back off and allow the Apple tree to flourish instead of rot.

 

[Pakaku]

Apple's rotten core. Why on earth would Apple, with its huge margins, its sales model, play at this game of trying to extract even more coin through completely unreasonable terms and contracts. Shareholders need to back off and allow the Apple tree to flourish instead of rot.

They always seem like a company that likes to try to get away with as much as they can until it feels too risky.

 

[Glassed Silver]

Wouldn't be surprised one bit to see illegal practices being found.
Apple never plays softball with their partners.

Also wouldn't put it past them that they try and extort them in markets where they have leverage.

A carrier not carrying the iPhone doesn't look too good ever after Apple lifted exclusivity.

Glassed Silver:ios

 

[allenvanhellen]

The iPhone wasn't available in South Korea until the 3GS. Why? Could it be... Samsung?!

 

[Kroo]

Now I wonder if Samsung has had a hand in this, with their track record for corrupt and criminal business practices and their ties to government it would surprise. Me. Now if we were to list the corrupt practices of Samsung,, we'll lets just say there isn't enough internet to cover it fully.

 

[Jason83]

Let's all take a moment to introduce pot to kettle. A cellular carrier is actually complaining about unfair contracts!

 

[2457282]

Fair (cough....Samsung.....cough) Trade (cough....Samsung.....cough) Comission.

Yeah I have this nasty cough, sorry.

 

[kdarling]

The same charges were brought up in France earlier this year, and Apple was fined $54 million for forcing unfair contracts.

A few years back, Taiwan... as home to HTC, a country not known for being friendly with Samsung... also fined Apple for interfering with pricing.