Price fixing amongst large Korean technology companies is apparently a fad now. First, we had large scale settlements with the US government over LCD panels (and one trial), now we have the Korean government issuing a broad set of fines for price fixing in the handset space. SK Telecom, Samsung, KT, LG Uplus, LG, and Pantech are all accused of colluding to trick Korean consumers by artificially raising prices and then offering "discounts" that made buying their premium phones look like better deals than they actually were. In sum, Korea's Fair Trade Commission has levied around $40 million in fines against the companies and demanded that they all come clean with details on how they operated the scam.
The core issue, the FTC contends, is that these companies artificially raised the pre-subsidy price and then utilized subsidies to trick consumers into essentially overspending because it looked like a good deal: "Under the current sales structure, in which handsets and telecom services have been combined, it is very difficult for consumers to understand the pricing policy." Not surprisingly, the companies defended the subsidy structure. Korea's FTC did explicitly name one company that has steered away from the scam: Apple.