Logos of major mobile carriers are seen at a retail store in Yongsan, Seoul, in this undated file photo. Yonhap
Mobile carriers set to take legal steps
By Lee Min-hyung
The top three mobile carriers here — SK Telecom, KT and LG Uplus — were slapped with fines worth 114 billion won ($78.55 million) on Wednesday, for colluding to adjust the number of their subscriber changes, the Fair Trade Commission (FTC) said.
According to the antitrust watchdog, the three major telecom firms reached an internal consensus to control the number in the nation’s mobile number portability (MNP) market, so any particular firm could not report steep subscriber gains or losses between 2015 and 2022. The MNP is a system enabling mobile subscribers to keep their phone numbers unchanged even after changing carriers.
The collusive act was conducted by their joint market monitoring task force, which operated between November 2015 and September 2022. They launched the task force, as part of self-regulatory efforts after they were sanctioned by the Korea Communications Commission (KCC) for violating the Mobile Device Distribution Improvement Act. The act is aimed at preventing mobile carriers from offering excessive sales incentives to retailers.
However, they formed the collusive alliance by sharing their sales incentives and the changes of subscribers in real time, according to the FTC. For instance, if a mobile carrier experienced a significant net loss in its MNP subscribers, the two other competitors lowered their incentives and allowed the affected carrier to raise its incentives.
A daily net change of the three mobile carriers’ MNP subscribers reached 3,000 in 2014, but the figure drastically decreased to around 200 since 2016, according to the FTC investigation.
The FTC said the act ended up limiting free competition and helping them maintain their subscribers stably during the period.
The collusion was also reinforced by direct communication between sales executives from each carrier. A sales executive of a mobile carrier reporting net gains in the number apologized to others suffering losses. The investigation also found that when a losing carrier was unable to swiftly react, the two others collectively decreased their incentives to fulfill the agreement.
The FTC ordered the three carriers to rectify the unfair business practices and imposed hefty fines.
“The nation’s telecom market has de facto reached saturation, so the three carriers face a zero-sum game, which is why they decided to refrain from engaging in competition to steal subscribers from each other,” the FTC said in a statement.
The three carriers expressed regret over the FTC sanctions, saying they never reached a collusive agreement with each other.
SK Telecom said it will consider taking legal action.
“SK Telecom has never colluded with other carriers,” a spokesperson at the carrier said. “We will take legal steps as soon as we receive a resolution from the FTC.”
KT also shared a similar stance, adding that it will also take legal procedures to prove its innocence.
LG Uplus claimed it did its best to comply with the Mobile Device Distribution Improvement Act after facing sanctions for initial violations, but the latest sanction from the FTC shows otherwise.
“We followed regulations from the KCC to abide by the act, and did not reach any consensus with our rival carriers,” an LG Uplus official said.
“It is hard for us to accept the latest sanction by the FTC, which we consider a regulatory mismatch between different authorities.”
English (United States) ·