Telecom Company's 'Gapjil' Apple Provisional Plan Announced: "Ad Cost Sharing and 100 Billion Won Win-Win Fund"

Apple Korea Provisional Consent Decree Public Consultation Begins
Final Plan to Be Confirmed After Feedback from Sept 25 to Oct 3

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] A provisional consent decree containing Apple Korea's voluntary corrective measures for its 'gapjil'?abusing its power by shifting advertising costs onto domestic mobile carriers?has been prepared. If the final plan is confirmed, Apple is likely to compensate the mobile carriers for damages such as sharing advertising costs, thereby avoiding fines or prosecution.

Opinions are divided between those who see this as a positive function of the consent decree system, which extracts self-corrective measures before legal disputes arise, and those who view it as leniency toward corporations. The consent decree system allows a business operator to propose corrective measures to remedy consumer or trading partner damages, and if the Fair Trade Commission recognizes their validity, the case is swiftly closed without confirming illegality.

The Fair Trade Commission announced on the 24th that it will collect opinions from stakeholders on the provisional plan from the 25th until October 3rd, after which the final plan will be confirmed. Apple was previously accused of shifting advertising costs for TV, outdoor ads, and in-store display and exhibition fees onto mobile carriers after launching the iPhone 3GS in Korea in 2009. The Fair Trade Commission began investigating in 2016 and sent Apple a review report (indictment) in 2018 alleging violations of the Monopoly Regulation and Fair Trade Act. Subsequently, after three plenary sessions and three more deliberations following Apple's consent decree application, the provisional plan was prepared.

Source=Korea Fair Trade Commission

The provisional plan includes measures to improve transaction order, enhance user welfare, and support coexistence with small and medium-sized enterprises. The core is the transaction order improvement plan, which covers sharing advertising costs and improving consultation procedures. This is because the Fair Trade Commission was reviewing Apple's acts of shifting device advertising costs and warranty repair promotion costs onto domestic mobile carriers.

As part of the transaction order improvement plan, Apple proposed ▲excluding some of the subjects covered by the advertising fund and improving procedures at the fund consultation and execution stages ▲deleting warranty repair promotion costs and arbitrary contract termination clauses ▲replacing the current patent license clause with one that prevents patent disputes during the contract period while protecting the rights of carriers and applicants ▲adjusting the minimum subsidy level considering carriers' fee discounts and mutually consulting in case of non-compliance.

Source=Korea Fair Trade Commission

As a coexistence support plan, Apple announced it would establish a 100 billion KRW coexistence support fund. Specific measures include ▲establishing a manufacturing R&D support center for small and medium manufacturers and operating educational programs (40 billion KRW) ▲setting up a Developer Academy to select about 200 trainees annually and provide a 9-month education program in collaboration with local universities and startups (25 billion KRW) ▲collaborating with social enterprises to support digital education in innovation schools, educational blind spots, and public facilities (10 billion KRW) ▲offering discounts on paid repair costs for iPhone users and discounts or reimbursements for AppleCare services (25 billion KRW).

Source=Korea Fair Trade Commission

The Fair Trade Commission will collect opinions from stakeholders, the Prosecutor General through written consultations, and related administrative agencies such as the Ministry of Science and ICT, Ministry of Trade, Industry and Energy, and the Korea Communications Commission by October 3rd. The final consent decree will be confirmed after the opinion collection process and the Fair Trade Commission's review and resolution.

This is the ninth time since the introduction of the consent decree system that the Fair Trade Commission has approved a provisional plan and proceeded with the opinion collection process. It comes four months after the final approval of Namyang Dairy's consent decree plan in April.

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