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Apple requests consent decree deal with FTC

July 05,2019
Apple has made a request to the antitrust authorities to put to rest a legal dispute over alleged violations of competition laws.

The Fair Trade Commission (FTC) said Thursday that the Cupertino, California-based smartphone maker’s Korean unit applied for a consent decree on June 4.

If approved, the agreement would completely end the FTC’s deliberations on the company’s alleged abuse of its bargaining power against local telecommunications companies.

The request comes after three rounds of deliberations by the FTC’s standing committee since December last year on whether the company violated competition laws by forcing carriers to pay advertising and warranty costs. The FTC has claimed that Apple Korea exploited its strong position during transactions with telecommunications companies.

The company has been under investigation since June 2016.

The antitrust body said it will soon draft a report on Apple Korea’s application, which will be discussed by the standing committee.

The consent decree application will be reviewed based on Apple’s measures to improve its practices and prevent damage to other parties.

The request is not an admission of wrongdoing, the FTC explained.

“It has to report its actions factually, what improvement measures it will take on, the damage it caused to the market order and a plan on how it will help those who were harmed,” said Song Sang-min, head of the FTC’s anti-monopoly bureau.

“Applying for a consent decree does not mean an admission of violating fair trade laws,” said Song. “In the company’s perspective, it could either continue to dispute the violation through the court or present voluntary corrective measures.”

“Apple seems to have analyzed [both options] and made a decision on what is good [for them].”

If Apple is found to have abused its position by the standing committee, the company could face fines up to 2 percent of its related sales.

The last round of deliberations took place in March.

The FTC refused to comment on when a decision will be made, but added that it would have to be made within two weeks of the standing committee receiving the application.

It is unclear when the FTC will send its report to the standing committee.

According to the antitrust body, the most recent four requests for consent decrees by companies, including Qualcomm, were rejected.

Qualcomm’s consent decree over its abuse of market dominance was denied back in December 2016.

The FTC fined Qualcomm over 1 trillion won ($854.8 million) for fair trade violations that same month.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]