While Korea's FTC Claims that Apple is out to Squeeze the Profits of local Wireless Carriers, Apple Denies any such practice
Korea's Fair Trade Commission (FTC) has been building a case against Apple in early November 2017. Shortly afterwards they raided Apple's Korean offices in late November 2017. Erik Telford, president of the Franklin Center for Government & Public Integrity, also raised similar concerns at the time in an article for 'The Hill.' Telford wrote that "South Korea's anti-trust agency has exhibited alarming behavior that threatens the viability of companies doing business in South Korea, including such major American corporations as Apple, Google, Intel, Microsoft, Oracle and Qualcomm."
While the case went silent shortly after that Hill article, it resurfaced in April 2018. In November 2018 Patently Apple posted a report titled "Korea's Wireless Carriers Rev Up their War against Apple's Promotions Policy with Threats of Legal Action and more." That news just happened to be announced a day after wireless carrier SK Telecom and Samsung signed a deal for 5G. If that isn't a coordinated political hit, what is?
Today Korea's FTC claimed that Apple's practice of shifting advertising costs onto mobile carriers could be deemed as abuse of power, according to a document released today.
During the second round of deliberation, held last week, Apple claimed that its actions were justifiable, claiming the company does have an advantage over local mobile carriers in terms of negotiation, and that it does not have any real power it can exert.
Apple said that advertisements benefit both the company and Korean mobile carriers, and that the action was fully justifiable.
The FTC, however, claimed Apple, in reality holds a clear advantage over local mobile carriers, and that shifting the cost of advertisements is only another means to squeeze the profits of the carriers.
Accordingly, the watchdog said such practices cannot be considered a marketing strategy. The FTC’s economic analysis division delivered a similar claim.
A third deliberation is scheduled to be held on Feb. 20, where the detailed actions carried out by Apple are to be discussed.
The attitude from the FTC's comments and the local Korean tech press wanting Apple to be hung in public, it's difficult to see how Apple won't be heavily fined after round three in this case that is to be held on February 20th.
With the hostility shown by all three wireless carries against Apple it's no wonder why Apple signed a deal with Korea's Coupang that has more than 25 million customers (half the population of Korea at 51 million). The company has as many as customers as the three wireless carries combined.
Unlike Korea's wireless carriers, Coupang's founder and CEO Bom Kim, is thrilled to be working with Apple, proving there's a heavy dose of politics being played out against Apple by the FTC.
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