South Korea’s antitrust regulator, the Fair Trade Commission (FTC), has imposed a combined fine of 33.6 billion won ($25.4 million) on SK Telecom, KT Corp., and LG Uplus for deceptive advertising practices related to their 5G network services.
The three major South Korean telecom giants have been found guilty of making exaggerated claims about the performance of their 5G networks in their advertisements, falsely suggesting speeds that could only be achieved in specific environments.
“The three mobile carriers have deceived consumers by providing false or exaggerated information regarding the speeds of their services. They misleadingly claimed that users can experience speeds of 20Gbps, which, in reality, is only a theoretical target for 5G technology,” stated the watchdog in an official statement.
The FTC revealed that the three mobile carriers, in their advertisements, created an impression that users could actually achieve the maximum speed of 20Gbps. However, the carriers failed to substantiate this claim and provide evidence that their services could reach such levels, as reported by Yonhap news agency.
Recognizing the oligopolistic nature of the mobile communication market, the authority emphasized that misleading advertisements by the three carriers could significantly impact the fair trade regulations governing the industry. “When the advertisements were aired, the average download speed of the three carriers’ 5G services ranged from 656 to 801Mbps, which is only 3 to 4 percent of the claimed 20Gbps,” stated the regulator.
In a similar case, in 2017, Audi Volkswagen was fined 33.7 billion Won by the FTC for disseminating inaccurate information regarding the emissions of their vehicles, marking the largest fine to date. The fine imposed on the three mobile carriers is the second-largest.
In the South Korean telecom market, SK Telecom holds a market share of 39.4%, followed by KT at 22.4% and LG Uplus at 20.8%. The FTC intends to impose fines of 16.8 billion won on SK Telecom, 13.9 billion won on KT, and 2.8 billion won on LG Uplus.
SK Telecom expressed disappointment with the ruling by the FTC, while KT and LG Uplus issued statements indicating their intention to evaluate the decision once they receive the necessary documents from the regulatory body.