[Reporter’s Notebook] Silence is Gold? Broadcasting Commission Keeps Quiet on Fair Trade Commission Fines

The Mobile Carrier Market
Thrown into Confusion by Discord Between the KCC and FTC

The first plenary meeting held on the 26th of last month by the Fair Trade Commission (FTC) to decide on the fines for collusion among the three major mobile carriers. A legal representative of one carrier said, "(The FTC's) review report is really strange." There is a grievance behind a corporate official openly calling the regulatory authority's report "strange." The Korea Communications Commission (KCC) had set a policy stating, "When selling mobile phones, sales incentives should be given only up to 300,000 won," and the carriers followed this policy, but the FTC tried to impose fines, claiming that "giving only that amount constitutes collusion."

On the 12th, when the FTC imposed fines totaling 114 billion won, the KCC, which had issued the administrative guidance that became the reason for the collusion punishment against the carriers, remained tight-lipped. Neither the director in charge, the section chief, nor even the spokesperson could be reached by phone. It seemed they were worried about appearing to be involved in an inter-agency conflict. Sure enough, at a briefing held at that time, when asked if this was a clash between the two agencies, the FTC director responded, "Even if administrative guidance is involved in collusion, if it does not meet the principles of laws and Supreme Court precedents, it is punishable as an illegal act." Upon reflection, this can only be read as a contradiction that the three carriers must both follow the KCC's administrative guidance to voluntarily limit sales incentives and comply with the Fair Trade Act that requires competition through sales incentives.

Although the KCC remains silent, it is clear that it holds a consistent position opposing the FTC on this matter. According to the "KCC's actions after the FTC's fines on the three carriers' collusion" document obtained by this publication from the office of Assemblyman Lee Haemin of the Justice Party, before the FTC's first plenary meeting, the KCC conveyed the position that "the Act on the Improvement of Distribution Structure of Mobile Communication Devices (the 'Handset Distribution Act') is a special law that recognizes exceptions to free competition. The net increase or decrease in number portability of carriers and the allowance of sales incentives within 300,000 won are legitimate law enforcement." They also stated, "We will fully explain the unique characteristics of the handset distribution market at the FTC plenary meeting."

The carriers, who followed the KCC's administrative guidance, are protesting the fines as unfair. They expect the KCC to act as a more active shield. However, the KCC seems to be holding back, possibly to avoid appearing to oppose the stern FTC decision. It is hard to shake the impression that avoiding criticism of "inter-agency discord" takes precedence over taking responsibility for this issue. As the KCC hides, large law firms are accelerating their moves. A law firm official said, "In a situation where only companies suffer due to inter-agency discord, administrative litigation seems inevitable," adding, "In fact, only the law firms are benefiting."

The core problem of this situation ultimately lies in the lack of communication and responsibility avoidance between government agencies. The KCC should discuss with the FTC even now to establish a consistent policy direction. That is a responsible attitude as the main agency in charge of telecommunications policy. The carriers can also operate in a predictable environment. Companies should not be blindsided again while complying with the law.

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