Seongwook Cho: "Apple Consent Decision Includes Direct Consumer Benefits for the First Time... Not Favoring the Company" (Comprehensive)

Final Confirmation of Apple Korea's Consent Decree

Apple Establishes 100 Billion KRW Win-Win Support Fund…10% Discount on iPhone Paid Repairs
"Consent Decision Requirements Are Very Strict…Practically Impossible to Favor Companies"

Takes 19 Months Until Final Confirmation, Delaying Swift Relief…“Will Seek Measures for Expedited Process”
Consent Decision Introduction Also Planned for Onple Law and Jeonsang Law

Chairman Jo Sung-wook of the Fair Trade Commission is giving a briefing on the "Final Confirmation of Apple Korea Consent Decision" on the 3rd.

[Sejong=Asia Economy Reporter Joo Sang-don] Fair Trade Commission Chairman Cho Sung-wook emphasized on the 3rd, "Unlike before, the Apple Korea consent decision includes, for the first time, a plan to provide direct benefits to consumers by offering a 10% discount on paid repair costs."

On this day, Chairman Cho made this announcement during a briefing on the 'Final Confirmation of Apple Korea Consent Decision.'

Since 2016, the Fair Trade Commission has been investigating and reviewing Apple’s actions including ▲receiving advertising fees and warranty repair promotion costs from mobile carriers ▲setting conditions for free patent licenses and unilateral contract termination clauses against carriers ▲interfering with carriers’ device retail price decisions and advertising activities. During this process, Apple applied for a consent decision in June 2019, and after two reviews, the Fair Trade Commission initiated the consent decision procedure in June 2020. Subsequently, through stakeholder and related government agency consultations and discussions with the prosecution, the final consent decision proposal was submitted in November of the same year and was finally confirmed on the 27th of last month.

The corrective measures include ▲excluding some targets from the advertising fund application ▲deleting warranty repair promotion costs and discretionary contract termination clauses ▲introducing a mutual mechanism to prevent patent disputes ▲adjusting minimum subsidies, among other contents.

The win-win plan involves raising a total amount of approximately 100 billion KRW to include ▲establishment of a manufacturing R&D support center ▲developer academy establishment ▲support for digital devices in public education ▲discounts on paid repair costs for Apple devices and AppleCare Plus.

Chairman Cho explained, "This consent decision includes corrective measures for actively improving transaction order and win-win plans to support consumers and small and medium enterprises. It is meaningful in that it provides an opportunity to improve the transaction relationship between both parties more fairly through voluntary correction by the business operator, and that tangible benefits will be delivered to small and medium enterprises and consumers."

This consent decision includes direct benefits to consumers for the first time. Chairman Cho said, "When consumers repair iPhones, they can receive the same 10% discount benefit not only at Apple’s authorized service centers but also at AS centers operated by mobile carriers," adding, "The Fair Trade Commission will closely monitor Apple’s compliance status for the next three years."

He drew a line against criticism of 'favoring Apple.' There have been continuous criticisms that consent decisions do not investigate illegality if the business operator proposes reasonable corrective measures, implying favoritism toward companies. Regarding this, Chairman Cho said, "We are well aware of concerns that using the consent decision system might be favoring companies. However, since consent decisions are made according to strictly defined requirements and procedures in principle, it is practically impossible to favor any company."

The Fair Trade Commission plans to prepare improvement measures for the consent decision system. This is in response to criticism that the 19 months taken until the final confirmation of this consent decision did not meet the original purpose of 'swift restoration of competitive order and damage relief.' Chairman Cho stated, "Taking this case as an opportunity, we plan to thoroughly review the entire system to ensure that the consent decision system operates swiftly and efficiently according to its original intent and prepare improvement measures. We will consider ways to guarantee expedited procedures, such as advancing the application deadline for consent decisions or limiting the negotiation period after the consent decision initiation."

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