The Fair Trade Commission (FTC)’s secretariat has recently decided to impose penalties on Apple Korea over the unfair practice and sent an examination report to Apple Korea to seek an explanation.

Apple is likely to face sanctions from the South Korean antitrust watchdog over dumping its advertising and repair costs to local telecom operators.

According to industry sources on April 8, the Fair Trade Commission (FTC)’s secretariat has recently decided to impose penalties on Apple Korea over the unfair practice and sent an examination report to Apple Korea to seek an explanation.

After receiving an explanation of the issue, the FTC plans to hold a meeting within a few days to confirm whether to impose sanctions and the range. The FTC’s examination report can be compared to the indictment of prosecutors for a general criminal trial and the FTC’s meeting to a court trial.

According to the examination report, the FTC reached the conclusion that the California-based company has abused its market power against South Korean mobile carriers and it should be fined and carry out a correction order for compulsory buying, compulsory benefits and offering disadvantages.

Since Apple began selling the iPhone here in 2009, the company has been embroiled in allegations of unfair practices, including shifting advertising costs to local mobile carriers and getting telecom firms to host release ceremonies for new products. The smartphone maker is also under fire for ordering wireless providers to follow its own guidelines in designing ads without sharing the costs.

In addition, Apple Korea allegedly obligates them to bear repair costs and display stand installation costs and order a certain amount of products to sell in the country.

According to the industry, mobile carriers had to bite the bullet and backed down on the demand as the iPhone has had a solid foothold in the smartphone market.

The price of Apple’s premium iPhone X has also faced criticism among local consumers. The price of its 64-gigabyte and 256-gigabyte models are around 200,000 won (US$187) more expensive than in Japan and the U.S. The 64-gigabyte model costs 1.36 million won (US$1,273) and the 256-gigabyte handset, 1.55 million won (US$1,457), in Korea. Many smartphone makers partially bear the cost for subsidies that are offered by telecom operators to consumers. However, Apple has faced complaints from consumers as it refused to do so.

Amid growing speculation, the FTC began an investigation into them in 2016, and raided the Apple Korea office in Samsung-dong, Seoul, in June of 2016 and November of 2017.

Unlike Korea, other countries have taken a hard stance on Apple's unfair practices. In 2013, Taiwan slapped fines on Apple worth around 20 million Taiwanese dollars (US$683,068 or 700 million won) for controlling iPhone prices. In April 2016, France fined the company 48.5 million euros (US$59.39 million or 64 billion won) for having mobile carriers order a certain amount of products and pay for ads.

Source: businesskorea