Samsung, LG, Pantech, and Korean carriers fined for price fixing
The Fair Trade Commission (FTC) of South Korea has issued a combined fine of 45.3 billion won ($40.2 million, €30.8 million) to domestic mobile phone makers and carriers.
The manufacturers being fined are Samsung, LG, and Pantech – basically all of the Korea-based phone makers. The carriers who’ve received fines are SK Telecom, KT, and LG U+. Those are the three big carriers over there, in case you’re wondering.
So the scope of the fines couldn’t be more wide, even if the amount isn’t any record. Why did this happen? Because, apparently, the aforementioned companies all colluded to defraud consumers.
They artificially inflated the prices of 209 different mobile phones and then offered considerable incentives via promotions and ‘price reductions’ to consumers, tricking them into thinking they were getting great bargain prices for buying phones. When those ‘bargain’ prices were in fact the actual ‘normal’ prices. That reality was distorted by the companies first having inflated the prices.
It’s like if you went into an AT&T store and saw the following ad: iPhone 4S, now just $199.99 with contract! Normal price $999.99, save $800 by buying as soon as possible! Limited time offer.
Obviously, the iPhone 4S was never $999.99 with a contract (or without) in the first place, so that’s what the Korean FTC didn’t like.
In addition to paying the fines, the companies will also have to both stop the practice as well as release information on how much they have gained from it.
Via The Korea Times