The controversial fine from the KFTC appears to contradict the position of the regulator in attempting to stabilise excessive sales incentives
The KFTC fined SK Telecom, KT and LG Uplus over £60m for colluding to limit consumers switching between their networks
On 12 March 2025, the Korea Fair Trade Commission (KFTC) announced a KRW114bn (£60.6m) fine for the country's three mobile network operators for violating competition law by colluding on sales incentives. The regulator found that SK Telecom, KT and LG Uplus had colluded to determine sales incentives in order to limit consumers switching between their networks. The KFTC’s decision notes that this behaviour was ongoing between 2015 and 2022 and succeeded in driving down the numbers ported each day from 3,000 in 2014 to under 200 in 2016. According to the decision, operators were incentivised to collude to prevent driving up costs to compete for consumers in an already saturated market. The fine, which the KFTC states is still provisional pending a final decision, will be split among the three operators, with SK Telecom owing KRW42.7bn (£22.7m), KT owing KRW33bn (£17.5m) and LG Uplus owing KRW38bn (£20m). This amount is significantly less than originally speculated in October 2024, when reports suggested that the regulator was considering a fine of up to KRW5.5tn (£2.9bn) for the conduct.
The conduct at issue was coordinated through a task force formed in response to a KCC investigation that recommended stabilising sales incentives
According to the KFTC, operators remained in direct contact regarding daily changes in number porting requests and jointly agreed to increase or decrease sales incentives in order to encourage stability. The decision announcement includes numerous examples of communications between the operators where it was agreed that whichever firm had lost a significant number of subscribers in a given day would increase its sales incentives while the other two firms decreased incentives. These communications even included instances in which managers had apologised for significant increases in subscribers. Over the seven-year period during which the collusion occurred, annual cases of consumers switching fell from 17,037 to 7,210. However, it should be noted that the number of consumers switching was already trending downward and fell even more rapidly, from 36,703 in 2013, before the collusion began.
Discussions between operators on sales incentives were facilitated through the Market Situation Team, which was composed of representatives from each operator and from the Korea Association for ICT Promotion (KAIT) and formed in November 2015 as a self-regulatory measure following an investigation from the Korea Communications Commission (KCC). In 2014, the KCC investigated all three operators for violating the newly passed Act on Improvement of Mobile Terminal Distribution Structure by paying excessive sales incentives. The regulator recommended at the time that the operators set a market stabilisation baseline for sales incentives at KRW300,000 (£159).
The KFTC’s fine, and the KCC’s critical response, is the latest point of tension between the two regulators
All three operators have expressed their intent to challenge the fine, stating that they believed the conduct they are being penalised for was in line with the guidance received from the KCC following its investigation. The KCC had also previously commented that it believed the actions of the operators were taken to protect consumers in line with relevant guidance and should not be “excessively condemned.” The Mobile Terminal Distribution Act, under which the guidance was issued, was repealed in 2024 only 10 years after having been passed. The law regulated how operators were able to provide incentives to switching consumers, including device subsidies, to prevent discriminatory offers but was later understood to harm consumers in keeping device costs high. In addition to reflecting instability and a lack of clarity in regulation, the fine from the KFTC and the response from the KCC is the most recent point of tension between the two regulators, both with responsibilities for regulating the tech and telecoms sector. The South Korean Government’s redirection on regulating digital markets in 2024 presented a similar scenario in which the two regulators’ overlapping remits resulted in conflict, as opposed to collaboration.
