This article was displayed on the ChosunBiz RM Report site at 2:03 p.m. on Jun. 10, 2026.
A legal battle is heating up over whether the mobile carriers' subscriber number portability adjustment was collusion under the Fair Trade Act or a market-stabilizing response to the government's device subsidies regulation. The key issue is how far coordination among companies can be allowed when there was a market stabilization request from the Korea Media and Communications Commission.
The Administrative Division 7 of the Seoul High Court held the third hearing on the 4th in KT's lawsuit seeking to cancel the corrective order and penalty surcharge imposed by the Korea Fair Trade Commission. KT is arguing that the portability subscriber adjustment was not collusion among companies but a response aligned with the Korea Communications Commission (KCC)'s enforcement of the Mobile Device Distribution Improvement Act. The LG Uplus case held its first hearing on May 21, and the SK Telecom case is set for its first hearing in Oct.
◇ FTC says "they reduced competition to attract subscribers"… KT says "we only followed regulation"
The Korea Fair Trade Commission (FTC) said in Mar. last year that SK Telecom, KT, and LG Uplus jointly adjusted subscriber number portability net gains and losses from Nov. 2015 to Sep. 2022 to prevent them from tilting toward a specific company. The three carriers matched the scale of portability acquisition so that a particular carrier would not take away or lose too many subscribers.
The FTC concluded that this conduct restricted competition to attract subscribers among the three mobile carriers. For example, if SK Telecom raised sales incentives by 400,000 won, KT and LG Uplus responded by lowering their incentives by 100,000 won and 300,000 won, respectively. As a result, the average daily number of portability cases steadily declined from 28,872 in 2014 to 7,210 in 2022. The FTC viewed this as evidence that competition among the three carriers was significantly restricted.
Accordingly, the FTC decided to issue corrective orders and impose a penalty surcharge on the three companies. At the decision letter stage, the total penalty surcharge was set at 96.3 billion won. By company, the penalty surcharges are 38.8 billion won for SK Telecom, 29.9 billion won for KT, and 27.6 billion won for LG Uplus.
KT counters that the mobile market is a regulated industry subject to strong administrative controls. In the mobile market, device subsidies, sales incentives, and discriminatory acts against users are regulated under the Mobile Device Distribution Improvement Act. KT's position is that if concentration on a particular carrier increased, competition over sales incentives and subsidies would overheat, potentially triggering KCC sanctions.
KT's core argument is that the three companies did not autonomously agree to reduce competition. They say they acted to stabilize the market in line with the policy goals and enforcement environment of the regulatory authority seeking to curb overheated subsidies.
◇ Did they follow administrative guidance, or was there a separate agreement
The crux of this lawsuit is the boundary between administrative guidance and collusion. Under the Fair Trade Act, collusion is conduct in which companies jointly set prices, transaction terms, or volumes to restrict competition. However, in industries with strong government regulation, companies often argue that they acted in line with requests or administrative guidance from the regulator.
In such cases, courts examine whether administrative guidance actually existed, whether it had a legal basis, how specific it was, and whether companies had room for autonomous judgment. In particular, a key criterion is whether companies made a separate agreement to restrict competition beyond the regulator's request.
Baek Gwang-hyeon, an attorney at Barun Law, said, "Courts typically determine collusion by considering whether government regulation is grounded in law and, even so, whether companies had autonomous discretion but decided through mutual consultation." He added, "It is difficult to exclude collusion liability for mere administrative guidance lacking a clear legal basis, though government involvement or inducement may be considered as a mitigating factor at the penalty surcharge stage."
Attorney Han Seung-hyuk of YulChon also said the legal assessment can vary depending on the strength of the administrative guidance. Han said, "If administrative guidance is so strong that it is hard to acknowledge communications of intent among companies, the existence of an agreement itself may be denied," adding, "In heavily regulated areas like telecommunications, the fact that companies find it difficult to defy administrative guidance may be considered a ground for limiting liability."
For the FTC's disposition to stand, there must be support for the claim that there was an independent agreement among the three companies separate from KCC regulation. The key question is whether there was an agreement and implementation to align the scale of portability net gains and losses or the level of sales incentives, beyond mere information sharing.
Baek said, "What matters is whether the three companies agreed separately to meet specific net increase figures beyond complying with the cap set by the KCC." On the other hand, carriers such as KT need to persuade the court that the KCC's request was not a mere recommendation but effectively close to an administrative order, and that companies had limited room to compete independently.
◇ Ripple effects across regulated industries beyond telecom
This lawsuit may not be confined to the telecommunications industry. In heavily regulated sectors such as finance, energy, and platforms, communication between the government and businesses is frequent for reasons such as market stabilization, consumer protection, and curbing price spikes. In this process, if companies share information or coordinate quantities, prices, or transaction terms, collusion issues under the Fair Trade Act may arise.
Baek said, "If companies refuse the government's administrative guidance, they may face disadvantages in licensing or ex post regulation, and if they communicate to faithfully implement it, they can end up in a contradictory situation of violating the Fair Trade Act."
Han also explained that the objectives of the Mobile Device Distribution Improvement Act and the Fair Trade Act can conflict. The former aims to prevent excessive incentive competition and user discrimination, while from the FTC's perspective, restricting incentive competition can be seen as collusion. This means companies may have to shoulder legal risks between the two regulations.
Ultimately, this case will determine whether subscriber adjustment in the number portability market was a market-stabilizing measure under government regulation or an agreement among companies to avoid competition. Since all three telecom companies contested the FTC's disposition, how the court draws the line between administrative guidance and collusion is expected to affect future fair trade cases in regulated industries.