Logos of main cell carriers are seen at a retail retailer in Yongsan, Seoul, on this undated file photograph. Yonhap
The highest three cell carriers right here — SK Telecom, KT and LG Uplus — had been slapped with fines price 114 billion gained ($78.55 million) on Wednesday, for colluding to regulate the variety of their subscriber adjustments, the Truthful Commerce Fee (FTC) stated.
In accordance with the antitrust watchdog, the three main telecom corporations reached an inner consensus to manage the quantity within the nation’s cell quantity portability (MNP) market, so any specific agency couldn’t report steep subscriber positive factors or losses between 2015 and 2022. The MNP is a system enabling cell subscribers to maintain their telephone numbers unchanged even after altering carriers.
The collusive act was carried out by their joint market monitoring process pressure, which operated between November 2015 and September 2022. They launched the duty pressure, as a part of self-regulatory efforts after they had been sanctioned by the Korea Communications Fee (KCC) for violating the Cellular Gadget Distribution Enchancment Act. The act is geared toward stopping cell carriers from providing extreme gross sales incentives to retailers.
Nonetheless, they shaped the collusive alliance by sharing their gross sales incentives and the adjustments of subscribers in actual time, in line with the FTC. As an example, if a cell provider skilled a big web loss in its MNP subscribers, the 2 different rivals lowered their incentives and allowed the affected provider to boost its incentives.
A every day web change of the three cell carriers’ MNP subscribers reached 3,000 in 2014, however the determine drastically decreased to round 200 since 2016, in line with the FTC investigation.
The FTC stated the act ended up limiting free competitors and serving to them keep their subscribers stably through the interval.
The collusion was additionally strengthened by direct communication between gross sales executives from every provider. A gross sales government of a cell provider reporting web positive factors within the quantity apologized to others struggling losses. The investigation additionally discovered that when a dropping provider was unable to swiftly react, the 2 others collectively decreased their incentives to satisfy the settlement.
The FTC ordered the three carriers to rectify the unfair enterprise practices and imposed hefty fines.
“The nation’s telecom market has de facto reached saturation, so the three carriers face a zero-sum sport, which is why they determined to chorus from participating in competitors to steal subscribers from one another,” the FTC stated in an announcement.
The three carriers expressed remorse over the FTC sanctions, saying they by no means reached a collusive settlement with one another.
SK Telecom stated it’ll think about taking authorized motion.
“SK Telecom has by no means colluded with different carriers,” a spokesperson on the provider stated. “We’ll take authorized steps as quickly as we obtain a decision from the FTC.”
KT additionally shared an analogous stance, including that it’ll additionally take authorized procedures to show its innocence.
LG Uplus claimed it did its finest to adjust to the Cellular Gadget Distribution Enchancment Act after dealing with sanctions for preliminary violations, however the newest sanction from the FTC exhibits in any other case.
“We adopted rules from the KCC to abide by the act, and didn’t attain any consensus with our rival carriers,” an LG Uplus official stated.
“It’s exhausting for us to simply accept the newest sanction by the FTC, which we think about a regulatory mismatch between completely different authorities.”
