Three Telecom Giants Collude on Apartment Rooftop Rental Fees... 20 Billion Won Fine

Lowering Rental Costs Through Systematic Cooperation
Establishing a Permanent Consultative Body... Joint Response to High-Value Landlords

[Image source=Yonhap News]

The three telecommunications companies that colluded on rental fees for mobile communication equipment installed on apartment buildings and rooftops have been sanctioned by the Korea Fair Trade Commission (KFTC).

On the 25th, the KFTC announced that it would impose corrective orders and fines totaling approximately 20 billion KRW on SK Telecom, KT, LG Uplus, and SK's subsidiary SKONS for their collusive behavior.

According to the KFTC, since 2011, the three telecom companies competitively introduced 4G services and began large-scale investments to build nationwide networks. As costs surged due to competitive leasing of installation sites, the three telecom companies started colluding to reduce rental costs and suppress the nationwide upward trend.

In March 2013, the three companies systematically coordinated through headquarters and metropolitan area meetings to lower leasing costs. As an implementation plan, they agreed to form a permanent consultative body, jointly respond to high-value landlords, and disseminate headquarters' agreements to regional branches.

Thereafter, the consultative body managed rental fees by jointly deciding proposed and standard prices for lease negotiations through regular meetings and communications, and presenting these decided prices to landlords.

The consultative body also agreed on the upper limit of rental fees applicable when additional equipment was installed at existing leased locations.

They maintained this collusion for about 6 years and 3 months from March 2013 to June 2019. During this period, the average annual rental fee per contract decreased by approximately 940,000 KRW, from about 5.58 million KRW in 2014 to 4.64 million KRW in 2019.

The average annual rental fee for new contracts dropped by about 400,000 KRW, from 2.02 million KRW in 2014 to 1.62 million KRW in 2019.

The KFTC determined that such conduct constitutes purchasing collusion that directly harms apartment residents and others, and decided on sanctions.

The KFTC explained, "Even if there is no agreement on the final price, as long as such agreed prices influence the final price decision, it constitutes a hard-core cartel."

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