Korea’s Mobile Law Abolition: Delays in Follow-up Legislation Fuel Consumer Concerns

Six months after the abolition of South Korea’s Mobile Device Distribution Structure Improvement Act – often referred to as “Dantongbeop” – implementing legislation remains stalled. Addressing issues like forced high-rate plan subscriptions and unfair consumer practices is expected to be a priority for the newly functioning Broadcast Media and Communications Commission.

Legislative Impasse

According to information released on July 25th by the Broadcast Media and Communications Commission, a lack of quorum due to vacant standing committee positions is preventing the finalization of a schedule for subsequent legislation related to the Dantongbeop’s repeal. This includes revisions to the Act on the Establishment of the Korea Communications Commission and the Ministry of Science and ICT, as well as the abolishment and creation of related ordinances.

Did You Know? The Dantongbeop, repealed on July 22, 2024, previously prohibited differentiation based on subscription type and rate plan, and eliminated requirements for carriers to pre-disclose subsidies and limits on additional subsidies (15%).

The repeal of Dantongbeop was intended to encourage autonomous competition within the mobile telecommunications market, and a surge in subsidy competition has been observed. Events like SK Telecom’s SIM hacking and KT’s small-payment hacking incidents led to a rapid increase in number portability, injecting subsidies into the market.

Persistent Issues

However, problems persist, including the forceful promotion of expensive rate plans and the provision of misleading information. Support funds are sometimes offered exclusively with the most expensive rate plans exceeding 100,000 won, or customers are pressured into accepting unnecessary additional services as a condition of contract. A survey by the Korea Consumer Federation revealed that 32.4% of consumers do not believe their rates will decrease.

Concerns exist that these unfair practices and deceptive information could worsen during peak seasons, such as new device launches, graduation, and school entrance periods.

Expert Insight: The delay in implementing follow-up legislation creates a period of uncertainty for both consumers and mobile carriers. Without clear regulations, the potential benefits of increased competition could be undermined by exploitative practices, ultimately eroding consumer trust.

The Broadcast Media and Communications Commission had prepared draft revisions to the Act on the Establishment of the Korea Communications Commission and the Ministry of Science and ICT and related ordinances to prohibit excessive and unfair discrimination against users and to sanction the provision of false information. However, these have not been implemented six months after the repeal.

Looking Ahead

The formation of a decision-making committee within the Broadcast Media and Communications Commission is anticipated next month. Following its establishment, completing the revisions to the Act on the Establishment of the Korea Communications Commission and the Ministry of Science and ICT and related ordinances, based on input from both the industry and consumers, is expected to be the most urgent task in the communications sector.

A representative from the Broadcast Media and Communications Commission stated that the implementing ordinances and guidelines related to the Dantongbeop repeal are largely prepared and will be expedited once the committee is formed.

Frequently Asked Questions

What was the purpose of the Dantongbeop?

The Dantongbeop aimed to improve the distribution structure of mobile communication devices.

What issues are continuing despite the Dantongbeop’s repeal?

Issues such as the forceful promotion of expensive rate plans and the provision of misleading information continue to be reported.

What is the Broadcast Media and Communications Commission planning to do?

The Broadcast Media and Communications Commission is preparing draft revisions to legislation to prohibit unfair discrimination and sanction false information, but implementation is currently delayed.

As the regulatory landscape evolves, how might consumers best protect themselves from potentially unfair mobile subscription practices?