Korean government may go after Apple for dumping ad costs to carriers

The Korean Fair Trade Commission may lay down major monetary penalties against Apple.

The reason, as The Korea Herald reports from industry sources, will likely be because the country’s carriers have been complaining that the maker of the iPhone has been dumping advertising costs for that device onto them. The KFTC has apparently contacted Apple for an explanation and will issue a ruling soon after it gets one.

Insiders at Korea’s three largest carriers — SK Telecom, KT and LG U+ — have complained about the cost relays as they receive standardized marketing materials from Apple, but are assigned with the costs to distribute them on airwaves and at stores.

“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,” said one network executive. “Still, telecom firms should bear all the costs standing at billions of won.”

The Taiwanese government hit Apple with a US$666,700 fine in 2013 for violating free-trade laws in requiring approval before carriers could set pricing for the iPhone. Meanwhile, the KFTC also targeted chipmaker Qualcomm for a record fine with allegations of anticompetitive behavior in the modems business.

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Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.