Apple releases 100 billion won in’gap controversy’ Confirmation of the consent of the Fair Commission

Input 2021.02.03 12:00

Apple’s voluntary remedial bill, which has surrendered advertising and repair costs to domestic mobile carriers, received final approval from the Fair Trade Commission. The main goal is to support small and medium-sized enterprises (R&D) by spending 100 billion won, and to reduce iPhone repair costs by 10%.

The Fair Trade Commission announced on the 3rd that it had confirmed Apple’s consent resolution on the 27th. Consent resolution is a system in which if a company violating the law proposes a voluntary remedy, the FTC deliberates it and, if it is deemed appropriate, closes the case without questioning whether it is illegal.

Since 2016, the FTC has been investigating Apple on charges of unreasonable “cheating” such as surrendering advertisements and repair fees to Korean mobile carriers such as SK Telecom and interfering with subsidies. Apple applied for an agreement to the Fair Trade Commission in June 2019, saying it would voluntarily correct this.

Accepting this, the FTC decided to start last year after three evaluations, prepared a provisional plan, and finally confirmed this year after collecting opinions from relevant ministries and mobile operators. The conclusion came after 19 months. Initially, Apple’s correctional plan had only half of the win-win fund, but as the FTC rejected it, the negotiation process was lengthened.

Apple decided to offer 100 billion won as a win-win fund. The main focus is the establishment of a SME R&D support center, discounts on repair fees for Apple devices, and support for digital devices in public education. Prior to the announcement of the provisional agreement, the political circles and the Ministry of Science and Technology argued that the amount of win-win support was too small compared to Apple’s sales, and that it should be increased.

“It is difficult to disclose in detail because it is Apple’s trade secret,” said Song Sang-min, head of the Fair Trade Commission’s market supervisory authority. The scale was 800 million won, and France, which is currently under lawsuit by the competition authorities, also has a penalty of 65 billion won. The scale of the win-win fund is never small.”

In addition, Apple has decided to transparently and fairly improve the procedure at the stage of consultation and execution of the advertisement fund in order to resolve unfair practices such as skipping advertising expenses, and deleting the warranty repair promotion fee and the provisions of voluntary termination of the contract. Instead of the current patent license provisions, it was decided to introduce a mutual mechanism that guarantees the rights of mobile operators and applicants while preventing patent disputes during the contract period.

Apple will implement voluntary remedial measures for the next three years. The FTC plans to appoint an accounting firm as a performance monitor and check the performance status on a semi-annual basis. An official from the FTC said, “Unlike other corrective measures, it was judged that the establishment of a research and development center or measures such as developer academy required accounting expertise when checking the implementation.” “We will monitor closely to ensure that measures are not passed on to consumers due to cost increases.”