Feeds

Samsung and LG hit with MASSIVE price fixing fine

Korean mobile firms colluded to con punters

The Power of One Infographic

South Korean regulator the Fair Trade Commission (FTC) has slapped a 45.3bn won (£25.5m) fine on mobile phone operators and handset makers in the country including Samsung and LG after finding them guilty of price fixing and consumer fraud.

The Yonhap news agency reported that handset giants Samsung Electronics Co and LG along with Pantech, and mobile operators SK Telecom, KT and LG Uplus were all judged by the FTC to have defrauded consumers.

The scam reportedly worked by the handset makers artificially inflating the price of certain handsets which the operators could then offer on contract at discounted prices to incentivise customers into buying them.

In total, 209 models were reportedly marked up artificially in this way.

SK Telecom was the worst offender, if the fines levied are anything to go by, having been hit by a 20.2bn won (£11.4m) penalty, while Samsung was the naughtiest handset maker, having its wrists slapped with a 14.2bn won (£8m) fine. Carrier KT got off with a 5.1bn won (£2.9m) fine.

"Companies took advantage of the complicated price setting practice in the mobile telecommunications sector to trick consumers," an FTC official is quoted as saying.

Aside from the financial penalties levied, the firms involved have been ordered to reveal exactly how much they provided in various incentives to encourage sales. Such incentives will also be banned by the FTC in future, the report said.

Price fixing is not uncommon in the South Korean tech space.

Back in 2008, for example, LG was found guilty of conspiring with Sharp and Taiwanese firm Chunghwa in a plan to drive up the price of LCD monitors.

The US authorities fined the Korean electronics giant $400m for that one, and rival Samsung was also subsequently caught in the fall out as investigators dug deeper into the cartel. ®

The Essential Guide to IT Transformation

More from The Register

next story
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Microsoft unsheathes cheap Android-killer: Behold, the Lumia 530
Say it with us: I'm King of the Landfill-ill-ill-ill
All those new '5G standards'? Here's the science they rely on
Radio professor tells us how wireless will get faster in the real world
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.