Apple Korea under probe over unfair contracts with carriers

“The nation’s antitrust watchdog is investigating Apple Korea over the terms of its marketing contracts with local mobile carriers, sources said Tuesday,” Lee Min-hyung reports for The Korea Times. “Sources said Apple Korea has pressed carriers into buying a minimum volume of promotional iPhones and sharing the burden of repair costs. ‘The Fair Trade Commission (FTC) is investigating mobile carriers over the exact terms of their contracts with Apple, and Apple Korea will also be looked into soon,’ said a source.”

“Expectations are that the FTC may fine Apple Korea and urge the U.S. technology giant to revise its contracts with mobile carriers if any similar unfair terms are found,” Lee reports. “Apple Korea may have taken advantage of the competitive landscape among the nation’s three mobile carriers, each vying for subscribers for the popular iPhones, said the source.”

“In Korea, mobile carriers offer few subsidies for iPhones,” Lee reports. “‘As Apple does not allow mobile carriers to offer subsidies for iPhones, they may have been forced to pay for Apple Korea’s marketing activities,’ said another source. In recent years, Apple has been mired in similar controversies in other countries. In 2013, Taiwan’s antitrust authority fined Apple $666,000 over illegally interfering with iPhone pricing. This April, French authorities sued Apple for $55 million for abusing its market status in France, citing unfair clauses in its contracts with mobile carriers there.”

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