FTC chief goes af­ter Ap­ple’s al­leged abuse of mo­bile car­ri­ers

The Korea Times - - FRONT PAGE - By Nam Hyun-woo [email protected]­re­atimes.co.kr

New Fair Trade Com­mis­sion (FTC) Chair­woman Cho Sung­wook will hold her first com­mis­sion­ers’ meet­ing next week to de­cide whether the an­titrust agency will ac­cept Ap­ple Korea’s pledge to fix its al­leged ad cost dump­ing on mo­bile car­ri­ers here, ac­cord­ing to of­fi­cials, Tues­day.

The meet­ing has been draw­ing at­ten­tion as it will de­cide whether the FTC will con­tinue to in­ves­ti­gate al­le­ga­tions that the U.S. tech gi­ant has abused its mar­ket power over tele­com providers, or close the case with­out ques­tion­ing the il­le­gal­ity of such a prac­tice. Cho has al­ready hinted that she will take a closer look into the case. Ac­cord­ing to the FTC, Cho will con­vene the meet­ing Sept. 25 to de­cide whether to ac­cept Ap­ple Korea’s fil­ing of a con­sent de­cree re­gard­ing the com­pany al­legedly abus­ing its mar­ket power in deals with the car­ri­ers.

“Ap­ple Korea’s fil­ing of a con­sent de­cree will be dis­cussed at the meet­ing, but we can­not guar­an­tee whether a de­ci­sion will be made or if there will be ad­di­tional meet­ings. There is no rule on how many meet­ings will take place,” an FTC of­fi­cial said. “If the con­sent de­cree re­quest is ac­cepted, how­ever, the case will be closed with­out mak­ing a de­ter­mi­na­tion of whether the com­pany’s prac­tices are il­le­gal. Other­wise, the case will be pro­ceeded with as a stan­dard one.”

FTC com­mis­sion­ers have held three meet­ings since De­cem­ber over al­le­ga­tions that Ap­ple Korea un­fairly col­lected ad­ver­tis­ing funds from do­mes­tic tele­com firms, in­clud­ing SK Tele­com and KT, but they failed to reach a con­clu­sion at the last one held March 27.

The com­mis­sion­ers must de­cide whether to hand the case over to the prose­cu­tion or im­pose a fine on the com­pany.

The case en­tered a new chap­ter in June, af­ter the FTC an­nounced that Ap­ple Korea had filed the con­sent de­cree, a “par­tial sur­ren­der” that meant it would end some of the prob­lem­atic prac­tices. The FTC did not re­veal the de­tails of Ap­ple Korea’s fil­ing, but it was as­sumed to con­tain a plan to re­vise con­tracts with the lo­cal tele­com firms over ad­ver­tis­ing costs. If the FTC ac­cepts the fil­ing and be­gins the con­sent de­cree process, Ap­ple Korea will carry out the cor­rec­tive mea­sures and the com­mis­sion will close the case.

If the FTC re­jects the fil­ing, how­ever, its in­ves­ti­ga­tion will con­tinue. “If the FTC re­jects the fil­ing, it can be­come an­other global prece­dent find­ing the U.S. tech gi­ant’s busi­ness prac­tice as un­fair, since Ap­ple uses sim­i­lar poli­cies of pass­ing on iPhone mar­ket­ing costs in other coun­tries,” an of­fi­cial at a lo­cal tele­com com­pany said.

“If the FTC ac­cepts Ap­ple’s con­sent de­cree, on the other hand, it means the Korean com­pe­ti­tion author­ity will not ques­tion the prac­tice, pro­vid­ing grounds for Ap­ple to main­tain the pol­icy in other mar­kets.”

But chances of the case be­ing closed are not high, given that Cho has al­ready stressed the im­por­tance of the case. In a press con­fer­ence as a nom­i­nee last month, she men­tioned the on­go­ing FTC cases of Ap­ple, Google and Naver and pledged the agency would take a closer look into them.

The track record of the FTC’s ac­cep­tance of con­sent de­crees is not on Ap­ple’s side. Since De­cem­ber 2016, the agency has dis­missed four filed by Qual­comm, Hyundai Mo­bis, LS Group and Golf­zon. When the FTC dis­missed Qual­comm’s re­quest in De­cem­ber 2016, it said it would not ac­cept crit­i­cal and ob­vi­ous il­le­gal­i­ties in con­sent de­crees. Other coun­tries have al­ready taken a hard stance on Ap­ple. In April 2016, France fined the com­pany 48.5 mil­lion eu­ros (64 bil­lion won) for hav­ing mo­bile car­ri­ers pay for ads. In 2013, Tai­wan slapped a 700 mil­lion won fine on the com­pany for con­trol­ling iPhone prices.

Ap­ple Korea has been pass­ing on TV com­mer­cial costs for its iPhones and iPads to SK Tele­com, KT and LG Uplus. The car­ri­ers are also shoul­der­ing the costs of a “free” re­pair ser­vice. The wire­less car­ri­ers are claim­ing Ap­ple has abused its su­pe­rior po­si­tion to force them to do this. How­ever, Ap­ple Korea has re­futed this, say­ing it has no power to “abuse” chae­bol.

Yon­hap

Fair Trade Com­mis­sion Chair­per­son Cho Sung­wook speaks dur­ing her in­au­gu­ra­tion cer­e­mony at the com­mis­sion in Se­jong, Sept. 10.

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