Feeds

Samsung and LG hit with MASSIVE price fixing fine

Korean mobile firms colluded to con punters

Providing a secure and efficient Helpdesk

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. ®

Security for virtualized datacentres

More from The Register

next story
TEEN RAMPAGE: Kids in iPhone 6 'Will it bend' YouTube 'prank'
iPhones bent in Norwich? As if the place wasn't weird enough
Consumers agree to give up first-born child for free Wi-Fi – survey
This Herod network's ace – but crap reception in bullrushes
Crouching tiger, FAST ASLEEP dragon: Smugglers can't shift iPhone 6s
China's grey market reports 'sluggish' sales of Apple mobe
Sea-Me-We 5 construction starts
New sub cable to go live 2016
New EU digi-commish struggles with concepts of net neutrality
Oettinger all about the infrastructure – but not big on substance
PEAK IPV4? Global IPv6 traffic is growing, DDoS dying, says Akamai
First time the cache network has seen drop in use of 32-bit-wide IP addresses
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.