Apple 'Likely' to Face Sanctions in South Korea Over Unfair Carrier Contracts

Apple will likely face sanctions from the Korean Fair Trade Commission for unfair iPhone contracts that require local carriers to pay advertising and repair costs, reports The Korea Herald, citing industry sources.

Apple's Korean division has been criticized for asking carriers to foot the bill for advertising costs, launch events, and iPhone repairs, leading to an investigation from the Fair Trade Commission. The Korean FTC recently agreed to impose penalties on Apple Korea and has contacted the company for an explanation before making a final decision on whether or not to impose sanctions.

According to The Korea Herald, three Korean carriers, SKT, KT, and LG Uplus, were directed by Apple to air TV commercials promoting the iPhone 8 and the iPhone X, but were reportedly required to pay for the commercials.

"When you see iPhone's TV commercials here, everything is the same except for a telecom operator's logo at the end of the commercials. Still, telecom firms should bear all the costs standing at billions of won," said an executive of one of the three firms on the condition of anonymity.

Apple Korea has been under investigation in Korea since 2016, with the Korean Federal Trade Commission conducting raids in June 2016 and November 2017. It's not clear what kind of fines the company could be facing in the country should the FTC move forward with sanctions.

Top Rated Comments

(View all)

kdarling

11 months ago

South Korea? The home of Samsung? The country with the corrupt government? The country that is run by Samsung?

Who woulda thunk it?

:D

Says a guy with California in his signature, home of the few court wins Apple managed to get with patents that were quickly invalidated in other countries.

Accusations of hometown prejudice can be made all over the world.

Rating: 6 Votes

macfacts

11 months ago

So if you want to advertise your local franchise, the franchisee pays for their own advertising? That's pretty standard.

Or will car dealers start asking the manufacturer to pay for their advertising too?

Those local carriers want to advertise their services and phones they offer. Apple's contracts force them to make (edit: not make, show) "iPhone only commercials" and cover the cost.

What bizaroo world do you live in where that sounds reasonable.

Rating: 5 Votes

TheColtr

11 months ago

South Korea? The home of Samsung? The country with the corrupt government? The country that is run by Samsung?

Who woulda thunk it?

Rating: 3 Votes

alphaod

11 months ago

Rating: 3 Votes

Mousse

11 months ago

I see nothing wrong with having the carrier pay for advertising and events, but making them pay for phone repair?

Rating: 2 Votes

deanthedev

11 months ago

Please. What he said is true. Samsung has had not one, but two CEOs sentenced to prison. Along with dozens of other executives over the years. Can you name any Apple CEOs or executives that have gone to prison (and then released much earlier than they should have)?

Whether the poster lives in California is irrelevant, so why did you bother to bring it up?

Rating: 1 Votes

wesk702

11 months ago

Eat only the profit, rest is footed by everyone in the earth! Nice business model

1 Trillion, here we come.

Rating: 1 Votes

justperry

11 months ago

South Korea being protectionist isn’t relevant to a foreign company possibly getting sanctions?

The topic/issue is carrier contract, it has nothing to do with what you said/say.

Rating: 1 Votes

Ramchi

11 months ago

Eat only the profit, rest is footed by everyone in the earth! Nice business model

Rating: 1 Votes

kdarling

11 months ago

Please. What he said is true. Samsung has had not one, but two CEOs sentenced to prison. Along with dozens of other executives over the years.

That's a good thing, as it shows that South Korea is going through a dismantling of old ways. Paying a friend of a friend to help you with government red tape is common all over the planet. In the US we still do it, but semi-hide it by hiring people into civilian lucrative jobs afterwards.

In any case, it has zero to do with Apple and its carrier contracts.

Can you name any Apple CEOs or executives that have gone to prison (and then released much earlier than they should have)?

That might just show that the US still protects Apple execs even more than Korea used to protect Samsung execs.

Some think Jobs should've gotten jail time for his stock scandal, same as other less fortunate execs of smaller companies. Others think he should've gone to trial for his secretive anti-poaching and other anti-trust plots.

But, just like used to happen with Samsung execs, Jobs was deemed too valuable to charge with anything. There's very little difference in the types of influence going on in both cases. Well, except Samsung actually is critical to South Korea's economy and defense, unlike Apple.

Rating: 1 Votes

[ Read All Comments ]