KCC metes out largest ever fines over illegal subsidies

26 Jan 2018

South Korean regulator KCC has slapped the nation's operators with a combined 50.6 billion won ($47.6 million) in fines for violating the proscribed limit on handset subsidies, despite lifting the subsidy cap in September.

The fines meted out are the largest since the 330,000 won subsidy cap was introduced in October 2014, the Korea Heraldreported.

Market leader SK Telecom was fined 21.3 billion won, compared to 12.5 billion won for KT and 16.7 billion won for LG Uplus.

A total of 172 retail distributors of mobile devices were also fined a combined 18.4 million won, with Samsung Electronics' sales entity alone fined 7.5 million won.

The KCC has been regularly fining operators for going over the subsidy cap, which was introduced to try to prevent overly predatory pricing practices. The regulator even went as far as to temporarily suspend operators from signing up new customers as penalties for exceeding the subsidy limit.

While the KCC abolished the cap in September, the fines relate to subsidies that were offered between January and August.

The report quotes KCC chairman Lee hyo-sung as stating that the decision to impose the fines is aimed at convincing the market's operators to “shift their focus from wasteful marketing competition to improving service quality.”

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