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Korean FTC Approves Apple’s $89.7 Million Plan to Correct Unfair Market Practices

Korean FTC Approves Apple’s $89.7 Million Plan to Correct Unfair Market Practices

Apple Korea’s correction plan, which would see it spending 100 billion won ($89.7 million) to support consumers and small-sized businesses, has been approved by the Korean Fair Trade Commission. The approval brings to an end the years-long investigation into the company’s unfair market practices (via The Korea Herald).

The Korean FTC investigated Apple Korea for requiring SK Telecom, KT Corp, and LG Uplus Corp to pay the cost of television advertisements and warranty service for its iPhones.

The Korean FTC investigation found that Apple’s requirement that the carriers hand over the costs of ads and warranty service was just another way to squeeze more profits from the carriers.

While the Korean FTC had initially considered imposing penalties on Apple Korea, the company suggested a voluntary correction scheme to bring the case to an end. The FTC agreed to review the proposal last year.

The plan will see Apple spending 40 billion won on building a research and development center for local small-sized businesses in the mobile phone manufacturing sector and 25 billion won in offering consumers 10 percent discounts in iPhone repairs and warranties.

An additional 25 billion won will be allocated to establishing an education center to train ICT developers, while the remaining 10 billion won will be used to support digital education in schools and public facilities.

“We are pleased this process has reached a conclusion and look forward to expanding and accelerating our existing commitments here with these new investments that will benefit local suppliers and manufacturers, small businesses, entrepreneurs, and education,” Apple said in a statement.

“This broad range of initiatives will strengthen innovation and economic opportunity across Korea. We look forward to sharing more details on these plans in the months to come.”

The FTC announced that it will select an accounting firm that will follow up on Apple Korea’s implementation process on a half-year basis over the next three years. Should Apple fail to deliver on its promises, the company could face an enforcement penalty of 2 million won per day and have the correction scheme terminated.