Despite South Korea being the home of main smartphone industry rivals Samsung and LG, Apple has enjoyed much success in the country. Preorders for the company's iPhone 6s and iPhone 6s Plus smartphones in South Korea were sold out in all three of the country's carriers within 30 minutes or less, despite Samsung and LG trying to defend their home base through price reductions on their products.
Apple's relationship with South Korea, however, has changed into a less friendly tone, as the country's Fair Trade Commission announced that it is investigating the company on certain matters.
The announcement was made by Jeong Jae-chan, the anticompetition body's chairman during a hearing of the country's parliament. He did not disclose any other detail regarding the investigation, and even refused to reveal information when asked by a South Korean lawmaker.
While the investigations officially remain secretive, rumors are suggesting that the government is not happy with the contracts that Apple has signed with the country's mobile carriers, along with the way that Apple conducts its business in South Korea.
According to sources, Apple forced the carrier companies into acquiring a minimum number of promotional iPhones. In addition, the carriers were also required to share some of the costs for repairing iPhones.
The contracts that the carriers signed with Apple also allegedly contained a stipulation that prevented them from filing any lawsuit against the company within the first year of a dispute.
Apple has not provided any comment on the matter so far. According to a source though, the company may have taken advantage of the tight competition between South Korea's three carriers, as each of them are competing for subscribers for the popular iPhones.
This is not the first time Apple has been accused of unfair practices based on abusing its power in the smartphone market. Last year, the company was fined about $650,000 by Taiwan's Fair Trade Commission on anti-competitive practices, as Apple limited telecommunications companies from setting the contract price that accompanied the iPhone 4, iPhone 4s, iPhone 5 and iPhone 5s.
A couple of months ago, Apple was the target of a $55 million lawsuit from the French government due to provisions in its contracts with carriers in the country. The provisions allegedly gave Apple an unfair advantage, and the majority of the damages was intended to be given back to the four carriers involved in the lawsuit.
