Korean price fixing scam: Samsung, LG, and carriers fined

0

South Korea’s Fair Trade Commission found that LG, Samsung and Pantech, in addition to operators KT, SK Telecom and LG Upius are involved colluded to raise the price of cellphones, so they could offer “discounts” that still padded their bottom lines. The involved companies exploited the “complicated price setting practice” in cellphones to fool Korean customers, according to the FTC. The rermarks are likely allusions to carrier subsidies in return for contracts.

They artificially inflated the prices of 209 different mobile phones and then offered considerable incentives via promotions and ‘price reductions’ to consumers, tricking them into thinking they were getting great bargain prices for buying phones.

If the fines are any indication, then carrier SK Telecom and Samsung Electronics were the biggest offenders here — they netted themselves a 20.2 billion won ($17.9 million) and 14.2 billion won ($12.6 million) penalty respectively. FTC fines underscore the problems of what’s considered an insular Korean cellphone market.

Via The Korea Times

Follow Us on our Channels: