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KFTC commences the consent order process for Apple Korea
-Apple Korea suggests measures to bring mutual benefits to consumers and SMEs- June 18, 2020 Anti-Monopoly Division (Service)

1. Background of the application of the consent order process

On June 4, 2019, Apple Korea Inc.(hereinafter, "Apple") requested the KFTC to initiate the consent order process over its alleged abuse of superior bargaining power.

The KFTC has been investigating Apple's alleged abuse of market dominance including coercing local mobile carriers-its trading counterparts-to return some profits. Apple allegedly compelled mobile carriers to pay the costs for advertising its mobile devices and providing free repair services. In addition, the company forced disadvantages and interfered with their counterparts' business operation by setting lopsided terms with regard to patent rights and contract cancellation and interfering with the subsidy provision and advertisement of mobile carriers.

Instead of fighting legal battles, Apple chose to propose a consent order to the KFTC as it seeks to improve the relationships with mobile carriers and share mutual benefits with consumers and SMEs.

As part of corrective measures, Apple suggested implementing procedures for discussion to reduce the cost burden of mobile carriers and share that burden.

The measures also include ways to improve the terms that are unilaterally disadvantageous to mobile carriers, reduce the interference with their business operation and allocate a certain amount of support funds to promote mutual growth with SMEs, program developers and consumers.


2. The commencement of the consent order process

On June 17, 2019, The KFTC decided to commence the consent order process after considering the following circumstances:

○ Mobile device and telecommunications markets are the key industries that use ICT and are dynamic and rapid changing in their nature. In addition, it's important to swiftly tackle the unfair practices in these markets since they're closely related to the daily lives of consumers.

○ This case, which involves abuse of superior bargaining position, is expected to enhance the trading relationship between the counterparts through voluntary corrective action of an enterprise.

○ Also, the plans for mutual growth included in the corrective measures are expected to offer tangible benefits for SMEs, program developers and consumers.

The latest settlement process was held not define the specific details of corrective measures, but to decide on whether to initiate the consent order process. Therefore, the details of corrective measures will be finalized after collecting opinions from stakeholders, which then will be followed by deliberation and resolution by the KFTC.


3. Future Plans

First, the KFTC plans to propose a draft tentative consent order that complements and specifies the corrective measures after having a discussion with Apple at the earliest possible time.

Then, the Commission would take various opinions from stakeholders for 30 to 60 days.