Lawmakers have started taking action to end illegal subsidies offered to consumers by Korean smartphone makers including Samsung Electronics and mobile carriers.

The National Assembly’s Science, ICT, Future Planning, Broadcasting and Communications Committee on Wednesday passed a bill aimed at fixing the distorted retail structure of the local smartphone market caused by excessive subsidies doled out by handset makers and mobile network operators to entice customers.

The bill regulates the amount of subsidies, and requires the smartphone makers to report the subsidy amount, factory prices and selling prices of their products to the Ministry of Science, IT and Future Planning.

The clause that requires smartphone companies to disclose price-related information has been a matter of concern for some handset manufacturers.

The smartphone companies expressed concerns over potential damage to their firms as the bill would reveal their pricing strategies.

Global mobile network services providers could also request that Korean mobile companies provide the same subsidies as they offer to Korean consumers.

The bill could impact consumers as it may reduce the number of benefits consumers receive when buying smartphones.

The National Assembly is expected to make a final decision on the bill at the plenary meeting scheduled for Friday.

The bill, first proposed in May 2013 by Rep. Cho Hae-jin from the ruling Saenuri Party, has been caught in a tug-of-war between the ruling and opposition parties.

The government authorities have mainly focused on regulating the nation’s three major mobile carriers ― SK Telecom, KT and LG Uplus ― in the fight against illegal subsidies, although handset makers were also involved in the malpractice.

The three companies were each dealt 45-day business suspensions in March.
By Kim Young-won (wone0102@heraldcorp.com)