A cartel of mobile handset manufacturers and telecommunications companies have been slapped with a fine after being found guilty of price fixing and fraud.
South Korea’s Fair Trade Commission (FTC) gave Samsung, LG, Pantech and mobile operators SK Telecom, KT Corp and LG Uplus a combined fine of $40.1 million (45.3 billion won) claiming the cosy little group plotted together to mark up the prices of mobile phone handsets.
It is believed the mobile handset manufacturers artificially marked up the prices of 209 models.
They then handed these over to their mobile service operator mates, which tricked customers by advertising discounts on the products and services that should not have been so expensive in the first place.
SK Telecom was found to be the worst offender and was slapped with a $17.9 million (20.2 billion won) penalty. Samsung was the most disgraced handset maker, and was ordered to cough up $12.5 million (14.2 billion won).
However KT didn’t have to splash as much cash as its mates, being given a $4.5 million (5.1 billion won) fine.
As well as the fines, the red faced companies have also been ordered to show how much they pushed these false incentives to make their sales. They’ve also been slapped with a ban preventing them from offering future sales promotions.
A commissions spokesman told Yonhap News that the companies took advantage of the “complicated price setting practices in the mobile telecommunications sector to trick customers.”
He added that the companies found to have tricked customers didn’t have “transparent rules” for setting such prices.
Price fixing is nothing new in the Asian tech space. On Monday, Taiwanese flat panel giant AUO was accused of fixing its panel pricing, while in the past LG, Samsung and others have ended up in the deep end with authorities in both the US and Asia.