SEOUL, Feb. 3 (Korea Bizwire) — South Korea’s corporate watchdog said Wednesday it has approved the local unit of U.S. tech giant Apple Inc.’s proposal to address antitrust business practices and support measures for consumers and small firms.
Apple Korea has been under probe by the Korea Fair Trade Commission (KFTC) over allegations that it required the country’s three mobile operators — SK Telecom Co., KT Corp. and LG Uplus Corp. — to pay the cost of television advertisements and warranty service for its iPhones.
In August 2020, Apple Korea proposed measures to fix its anti-competitive business practices and a 100 billion-won (US$90 million) program to support consumers, mobile carriers and others.
South Korean law allows a company accused of anti-competitive practices to state a correction scheme without deliberating whether those practices violate the country’s competition act.
The move is aimed at speedily resolving the case and remedying the damage to consumers without resorting to legal means.
When the KFTC sees an applicant’s proposed corrective steps as reasonable, it closes the case without concluding whether its business practice was illegal. In June 2019, Apple Korea applied for the related procedure.
“We expect the move will help improve the business practice and provide actual benefits to small businesses and consumers,” the watchdog said.
The KFTC has said Apple Korea allegedly abused its dominant status over local mobile carriers and that passing on the costs of advertisements is only another means to squeeze their profits.
Under the support program, Apple Korea promised to spend 40 billion won to build a research and development center for local small businesses in the smartphone manufacturing sector.
Another 25 billion won will be spent to give consumers 10 percent discounts on repairs and a smartphone warranty service, the KFTC said.
Apple Korea will spend another 25 billion won to set up an education center to train developers in the information, communication and technology sector. It will also spend 10 billion won to support digital education at some schools and public facilities.
“We are pleased this process has reached a conclusion and look forward to expanding and accelerating our existing commitments,” Apple said in a statement.
“Our teams are hard at work on plans for a new R&D Manufacturing Accelerator and Apple Developer Academy, and we continue to deepen our support for public education.”
The KFTC said it will pick an accounting firm to check the implementation process by Apple Korea on a half-year basis for the next three years.
If the company fails to implement the steps without proper reasons, the regulator could impose an enforcement penalty of 2 million won per day and revoke the approval.