Apple agrees to pay South Korea US$89 million to end a legal dispute with the country
Apple has emerged on the losing side of an antitrust case pressed by South Korea's Fair Trade Commission. This body has been investigating the Cupertino giant's division in its jurisdiction since 2016, in response to complaints that it has been abusing its leading market position to gain disproportionately advantageous treatment from carriers in the country.
They reportedly include Apple using its power to nominate a minimum volume of units that these telecomms companies were obliged to buy in, and having them pay a certain percentage of iPhone repair costs. The Fair Trade Commission also upheld allegations that the carriers (which includes large national firms such as SK Telecom, KT and LG Uplus) were even obliged to pay for Apple ads.
Therefore, Apple is now liable for damages to be paid to the South Korean government, although this might take yet more wrangling in its courts to work out the extent of what is owed. Therefore, the Commission has an alternative in which a company found guilty in an antitrust case can take part in what is called a "correction scheme" instead.
In Apple's case, it takes the form of investments that "contribute to the domestic ICT ecosystem". They should result in the construction of a new 40 billion won (KRW, or US$35 million) research and development center, as well as ICT education center worth 25 billion won ($22 million), that will benefit smaller enterprises in South Korea.
Apple will also contribute 10 billion won ($8.9 million) to the digital arm of South Korea's public education system, and will spend a final 25 billion won on providing consumers with 10% discounts on their iPhone repairs
This, as the Commission's chairperson Joh Sung-wook noted in a recent press conference, is the first incidence of a correction scheme that results in such direct wins for consumers and small business in South Korea. Apple will now remain under observation from the Fair Trade body so as to ensure it complies with the terms of its new settlement.