The law’s repeal offers another context in which the Government is seeking to carefully balance the promotion of competition with the protection of consumer interests
The Government has repealed the Mobile Device Distribution Improvement Act after 11 years
On 22 July 2025, the South Korean Government, via the Ministry of Science and ICT (MSIT) and the Korea Communications Commission (KCC), abolished the Mobile Device Distribution Improvement Act. The act, which was originally passed in 2014, required operators to publicise the cash value of their official fixed handset subsidy offer and limited other handset retailers from offering additional subsidies worth more than 15% of this figure. In passing the law, the Government had aimed to respond to what it saw as a race to the bottom in lowering handset prices that could ultimately undermine competition in the mobile market as well as to ensure that all consumers had access to the same information and therefore the same discounts and other incentives when purchasing a handset. The official repeal of the act follows relevant legislative changes passed in 2024 as well as administrative guidance issued in July 2025 by the KCC aimed at preventing consumer harms following the act’s withdrawal.
The KCC will continue to closely monitor the market for potential abuses of the newly relaxed rules
Operators and retailers in South Korea are now no longer required to publish or limit the handset subsidies offered to consumers, although they must explain all terms related to any offered subsidies within contracts. Meanwhile, the three major operators – SK Telecom (SKT), KT and LG Uplus – have voluntarily agreed to continue publishing subsidy information in order to maintain transparency. Device manufacturers, including Apple and Samsung, will also be required to submit monthly data to MSIT and the KCC on the incentives they offer to operators and other retailers. Operators will also now be allowed to offer different subsidies to consumers based on subscription types and tariff plans (i.e. discriminating between new and existing customers, or customers that upgrade their plan), which was previously prohibited under the act. The KCC has stated it intends to closely monitor any offers that may discriminate among consumers based on their age, region or other personal attributes, which remains illegal. This effort will include a focus on “information vulnerable” consumers, including older adults and teenagers, that may be more likely to be excluded, disadvantaged or misled through new subsidy offerings. The Government is also expected to convene a monitoring task force, including operators, that will convene twice a week to respond to “market chaos” or any signs of abuse of the more lenient standards.
The otherwise stagnant mobile market has seen movement in response to the SKT data breach and recent competition enforcement
In announcing its decision to repeal the act, the MSIT stated its expectations that end users will benefit from increased competition among operators and lower prices for handsets. The act was long criticised for artificially inflating the price of smartphones by limiting competition between retailers, particularly as the price of premium devices has continued to rise, as well as for insufficient enforcement, with illegal subsidy offers persisting despite regulation. The changes to promote competition coincide with the ongoing fallout of the data breach that impacted SKT in April 2025, which resulted in the operator losing approximately 800,000 subscribers and also brought predictions of revived competition in a saturated mobile market. However, the repeal of the act also follows less than six months after the announcement of the Korea Fair Trade Commission’s (KFTC) KRW114bn (£60.7m) fine of the three major operators for colluding to prevent competition in sales incentives, issued in March 2025. The balance between consumer protection and catalysing market activity, as well as balancing competing consumer protection priorities such as equity and affordability, therefore remains an ongoing challenge for both the Government and the KCC.
