The Korea Fair Trade Commission (KFTC) announced on July 4 that Apple filed for a consent decision with regard to its abuse of bargaining position in relation to SK Telecom, KT and LG U+. The KFTC recently investigated Apple regarding suspicions that it abused its superior position against the mobile carriers by, for example, forcing them to pay advertising expenses.
The consent decision is for the KFTC to close a case after a feasibility check when an investigated company suggests a corrective measure during its investigation. In other words, what Apple is trying to do is avoid penalties by pleading guilty.
South Korea adopted it in 2011. Three years later, Naver had its market dominance abuse case closed by using it. At that time, Naver established the Korea Internet Advertising Foundation and the Heemang Foundation in return for its consent decision. Qualcomm, which is currently in penalty cancellation litigation against the KFTC, filed for a consent decision in 2016, but the commission turned down the request.
“An application for the consent decision does not necessarily mean admission,” the commission explained, adding, “Apple seems to have reached a conclusion that the decision is a better option in view of estimated costs.”
The KFTC has focused on two allegations. One is that Apple raised an advertising fund together with the mobile carriers and then released advertisements only for its products and brand. The other is that Apple forced the mobile carriers to bear some of its after-sales service center running cost.
The commission concluded that the deeds constituted an abuse of bargaining position and tabled its final report to that effect at its plenary meeting in April last year. The meeting has been held three times so far, yet the final decision is yet to be made. The commission said that it would look closely into the corrective measures suggested by Apple.