South Korea's antitrust watchdog, the Fair Trade Commission (FTC), has fined mobile operators KT and LG Uplus KRW 6.2 billion (approximately USD 5.6 million) for hindering fair competition on the local market by excessively reducing prices of their corporate messaging services, Yonhap News Agency reports. KT and LG Uplus have received fined of KRW 1.9 billion and KRW 4.3 billion, respectively. The amount is preliminary and will be adjusted later after calculating related sales, FTC said.
According to the FTC, KT and LG Uplus have allegedly took advantage of their own communications networks to excessively cut the prices of their corporate messaging services, forcing out smaller competitors from the market. Smaller companies have to borrow the networks from major mobile carriers to send messages, which cost an average of KRW 9.2 per SMS. KT and LG Uplus set the prices of their own corporate messaging service below cost, FTC said.
Corporate messaging services allow companies to send messages to their customer, including notifications of credit card payment or updates on product delivery. Of the three major mobile carriers, KT and LG Uplus offer corporate messaging services, which had long been dominated by smaller companies. Back in 2006, smaller companies owned a 71 percent share of the market, while the two mobile carriers held a combined 29 percent. In 2013, however, the market share of KT and LG Uplus jumped to 71 percent, the FTC said.
