The Surgery Table of the 단통법, 'Sales Incentives' to be Disclosed... Legislative Competition Intensifies in the Second Half

[Asia Economy Reporter Joeslgina] The so-called 'communication blackout law' label attached to the Act on the Improvement of Distribution Structure of Terminal Devices (DanTongBeop) is set to undergo revision six years after its implementation. Measures under discussion include shortening the subsidy announcement period to three days and requiring mobile carriers to disclose or report sales incentives given to dealerships. While these steps aim to eradicate illegal subsidies, concerns have been raised that disclosing incentives could violate trade secrets and undermine market competition. With the launch of the 21st National Assembly, legislative competition is expected to intensify in the second half of the year.

◆"Trade Secret?" Controversy Over Disclosure of Sales Incentives= According to industry sources on the 8th, the 'Mobile Terminal Device Distribution Structure Improvement Council,' established to amend the DanTongBeop, will soon hold a face-to-face meeting to discuss these matters. The main issues include ▲ shortening the subsidy announcement period (from 7 days to 3 days) ▲ expanding the cap on additional subsidies provided by distribution points (currently 15%) ▲ and disclosure of sales incentives.

In particular, the council believes that to eradicate illegal subsidies in the terminal device distribution market, the incentive system paid by mobile carriers to dealerships and sales outlets must be revised. A council participant pointed out, "The core issue of user discrimination in the DanTongBeop amendment arises from opaque incentives." Another attendee conveyed the atmosphere, saying, "There was a need to address this issue even within the distribution network."

The problem lies in the side effects of disclosing incentives, as they constitute a type of corporate trade secret. The three major carriers?SK Telecom, KT, and LG Uplus?also show clear reluctance. Difficulties are expected in negotiations over details such as the disclosure cycle. Manufacturers, including Samsung Electronics, are also concerned about adverse effects, arguing that it could undermine market autonomy.

The Korea Communications Commission (KCC) is leaning more towards a reporting system rather than full disclosure of incentives, considering these controversies. The idea is to require prior reporting of the incentive scope and deem payments within that range as legal. However, this too could restrict market competition and potentially backfire. A representative from a mobile carrier dealership in Yeongdeungpo-gu criticized, "Are they saying that places selling 1,000 units and those selling just one should receive the same incentives?" and added, "It still violates the market competition system."

Stakeholders have differing views on shortening the subsidy announcement period. Carriers and manufacturers argue that reducing the usual one-week announcement period could inadvertently fuel cutthroat competition and increase uncertainty in the system. Conversely, civic groups, distribution networks, and government officials view the reduction positively. Regarding the proposal to raise the cap on additional subsidies, small-scale distributors express discomfort. Carriers plan to monitor specific developments closely, as the cap ratio could ultimately affect their own burdens.

◆ Legislative Competition Expected to Intensify in the Second Half= Amending the DanTongBeop is considered one of the key issues for the soon-to-be-launched 21st National Assembly. Given the difficulty of detailed negotiations on major issues, it is expected to become a legislative competition.

Previously, Assemblyman Byeon Jae-il of the Democratic Party of Korea proposed an amendment to the DanTongBeop that prohibits mobile carriers from giving unfairly discriminatory incentives to dealerships and sales outlets, with penalties of up to 300 million KRW for violations. The Korea Information Society Development Institute (KISDI), through its 'Terminal Device AS Status Survey and DanTongBeop Amendment Direction Study' conducted until the end of last year, recommended introducing differential regulations rather than caps on incentives and suggested establishing provisions related to unfairly discriminatory subsidies.

There is also a call to expand the council before the legislative competition. Currently, the council consists of 15 members, including the KCC, Ministry of Science and ICT, the three mobile carriers, related associations, professors, lawyers, and civic groups. So far, manufacturers such as Samsung Electronics and LG Electronics have been excluded, as discussions have focused on improving the distribution structure. Online communities like 'Mobile Phone Ppomppu' have also not been included.

This content was produced with the assistance of AI translation services.