Top S.Korean mobile carriers fined $25.4 mn for false ads on 5G speed

Seoul, May 24

South Korea's antitrust regulator said on Wednesday it has decided to fine the country's three mobile carriers a combined 33.6 billion won ($25.4 million) for their misleading advertisements on the speed of the fifth-generation (5G) network services.

The move came after SK Telecom, KT Corp. and LG Uplus exaggerated the performance of their 5G network services, with their advertisements providing speeds that can only be observed in a limited environment, according to the Fair Trade Commission (FTC).

"The three mobile carriers have delivered false or exaggerated information on their services' speeds by deceiving consumers that they can experience 20Gbps speed, which is only a target in theory for the 5G technology," the watchdog said in a statement.

The FTC said while advertisements gave the impression that users could actually enjoy the maximum speed, the three mobile carriers have failed to verify that their services can reach that level, reports Yonhap news agency.

For example, SK Telecom and KT claimed it takes only 0.8 second to download a 2GB movie file via the 5G network, with LG Uplus also claiming it takes just a second to transmit a 2.5GB file in their advertisements.

The three mobile carriers claimed themselves to be the provider of the fastest 5G service in South Korea, without offering verified test results.

"When the advertisements were aired, the average download speed of the three carriers' 5G services were between 656 and 801Mbps, which is only 3 to 4 percent of 20Gbps," the regulator said.

"Considering the oligopolistic structure of the mobile communication market, we have concluded that the three carriers' misleading advertisements can give a significant impact on the fair trade rule of the market," it added.

The recent penalty represents the second-largest fine ever imposed by the FTC for deceptive advertising. In 2017, Audi Volkswagen was fined 33.7 billion won by the regulatory body for providing incorrect information on cars' emissions.

SK Telecom, meanwhile, said the FTC's ruling was "regrettable."

KT and LG Uplus also released a statement that they will review the ruling as soon as they receive relevant documents from the FTC.