Regulators in South Korea reportedly went head-to-head over possible record fines on mobile operators for illegal handset promotions, with the Korea Communications Commission (KCC) opposing the penalties because the sales incentives were a result of a law limiting subsidies.

Following an investigation in 2023, the Korea Fair Trade Commission (KFTC) determined the operators colluded on smartphone promotions for retailers. It is preparing to fine SK Telecom up to KRW2.2 trillion ($1.6 billion), KT KRW1.7 trillion and LG Uplus KRW1.6 trillion, The Korea Times reported.

KCC secretary general Cho Sung-eun said during a government audit meeting “it is difficult to view the case as collusion”, because the operators’ practices were in line with its administrative guidance, the newspaper wrote.

The KCC has argued since February the coordinated guidelines among the operators was not collusion or price-fixing and resulted from the government’s subsidy cap.

A law introduced in 2014 capped handset subsidies at KRW300,000. The country’s Constitutional Court upheld the rule in 2017.

In 2020, the KCC fined the three operators KRW51.2 billion for continued subsidy regulation breaches, following penalties of KRW50.6 billion imposed in 2018 for illegal subsidies.