The Broadcasting and Media Communications Commission (BMCC) has imposed a total fine of 49 million won on KT, SK Broadband, and LG Uplus for restricting online subscriptions to standalone Internet TV (IPTV) products. The commission decided to accept a legal interpretation from the Ministry of Government Legislation stating that a member who is subject to avoidance is included in the quorum for meetings but excluded from the voting quorum.
During its 37th general meeting held on September 23 at the Government Gwacheon Office, the BMCC announced that it would fine KT 14,122,124 won, SK Broadband 31,078,155 won, and LG Uplus 3,803,653 won for violating prohibited acts under the Internet Multimedia Broadcasting Business Act.
KT had stipulated in its terms of service that customers could choose the contract period for IPTV standalone products, yet it limited online subscriptions to a three-year contract. While customers could select different contract periods offline, options for one-year, two-year, or no-contract products were not available on the website. Additionally, information on fees for different contract periods was not easily accessible.
Following the ruling, KT removed the phrase stating that only a three-year contract was available and revamped its website to allow customers to choose from three-year, two-year, one-year, and no-contract options.
KT's violation occurred over an 18-day period from May 1 to May 18, 2023, during which 1,291 lines subscribed to the IPTV standalone product. The BMCC calculated related sales at 5.648 billion won, reflecting an online subscriber share of 5.55%. Considering the low severity of the violation, a penalty rate of 0.25% was applied.
SK Broadband and LG Uplus were found to have restricted online subscriptions to IPTV standalone products altogether.
SK Broadband only posted pricing information for bundled products that included IPTV and internet services on its website, without providing information or an online subscription button for standalone IPTV products. The violation period was 45 days, with related sales amounting to 6.215 billion won, reflecting an online subscriber share of 3.16%.
Similarly, LG Uplus provided information only for bundled products and did not offer details or an online subscription option for standalone IPTV products, even stating that online subscriptions for standalone IPTV were not available. Its related sales were estimated at 760 million won.
The BMCC deemed the severity of violations by both companies to be low and applied a penalty rate of 0.5%.
This enforcement action comes nearly three years after the former Korea Communications Commission announced plans to investigate prohibited practices by IPTV providers in April 2023. Following a June inspection, the commission began a fact-finding investigation in November. The Fair Trade Commission responded last April, stating it had no separate opinions regarding the imposition of fines.
Commission members emphasized the need to further investigate whether the subscription restrictions observed online were also occurring offline.
Commissioner Ryu Shin-hwan stated, "Restrictions on consumer choices significantly impact users and constitute unfair practices that limit options. If similar actions are repeated or similar cases arise, we must impose strict penalties." He added, "While there may be a permissible range for marketing under the guise of bundled discounts, if it effectively restricts access to standalone products, it should also be considered an unfair practice."
Commissioner Yoon Seong-ok noted that online subscribers account for about 3%, indicating that offline subscriptions are much higher. He suggested that in addition to in-store investigations, public awareness surveys should be conducted to assess whether user rights are still being infringed.
The BMCC plans to confirm compliance with the corrective orders after sending the decision documents to the companies.
During the meeting, the commission also discussed the inclusion of members subject to avoidance in quorum calculations. The Ministry of Government Legislation interpreted that such members should be included in the meeting quorum but excluded from the voting quorum, and if they leave, they should be excluded entirely. Commissioners Lee Sang-geun and Choi Soo-young opposed this due to potential legal disputes, but Ryu Shin-hwan, Yoon Seong-ok, and Vice Chairman Ko Min-soo argued for acceptance to prevent administrative gaps. Chairman Kim Jong-cheol decided to apply the Ministry's interpretation as the operational standard with the support of four commissioners.
Additionally, proposed amendments regarding the formation of specialized committees, the order of acting chairpersons, and the terminology related to meetings were reported. These matters are expected to be decided next month following administrative notice.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.