Many major manufacturers regularly face antitrust issues where they have to pay millions of dollars in settlement. Apple is not different, in fact, it faces a lot of legal tussles annually. Of course, we would expect this considering its size of operations. Now, the latest antitrust issue facing Apple is in South Korea and it may pay over $80 million.
According to South Korea’s antitrust regulator, Apple’s South Korean subsidiary is proposing measures to address the antitrust concerns. In its proposal, the company will have to spend up to 100 billion won (approximately US$84.02 million). Apple will use this fund to support projects from South Korean small businesses, consumers, and others.
Prior to this, Apple Korea has been under investigation by the Korea Fair Trade Commission (KFTC). The investigation is due to the allegation that Apple is abusing its dominant market position. There were reports that the American company is forcing local mobile operators to bear advertising and warranty costs.
The Korea Fair Trade Commission said that Apple has agreed to amend its “unfair” terms with operators. For example, the company will discuss with telecommunications companies how to share advertising costs. This will also help to reduce the burden on operators.
Apple will not face investigation if its proposal is accepted
Of the 100 billion won ($84 million) from Apple, 40 billion won ($42 million) will be used to build a research and development support center. This center will only support small Korean manufacturers. Furthermore, another 25 billion won ($21 million) will go for the building of an “academy” to provide education for developers. The last 25 billion won ($21 million) will be used to give consumers discounts on warranty costs, as well as other benefits.
According to the KFTC, it will not make the final decision on the investigation alone. The Korea Fair Trade Commission stated that it will solicit public opinions on Apple’s proposal. If the public believes that the proposed remedies are reasonable, then it will close the case. In fact, it will not have to investigate the case anymore. This means that there will be no ruling on whether Apple has committed any violations. However, if the public rejects Apple’s proposal, then the company will either have to up its offer or face investigation.
According to data from the market research firm Counterpoint, Apple accounts for 18% of the Korean mobile phone market last year. However, it is far behind Samsung Electronics which has 65%.