South Korea’s antitrust agency has launched a probe into the country’s top mobile carrier SK Telecom Co. on an allegation that it had hampered market competition by unfairly supporting its former music streaming service affiliate that is now under Kakao.
According to industry sources on Tuesday, the Fair Trade Commission (FTC) sent an examination report to SK Telecom in the second half of last year in regard to a charge with its unfair support to former affiliate LOEN Entertainment, the operator of music streaming service Melon.
The FTC is expected to decide on penalty after a committee meeting before June.
The antitrust watchdog is looking into whether SK Telecom’s free Melon membership service or discounts hampered competition in the local music streaming market when LOEN Entertainment, now Kakao M, was under the country’s largest mobile carrier.
The FTC suspects that SK Telecom unfairly supported LOEN Entertainment by receiving cheaper commissions.
LOEN Entertainment was sold to a private equity fund in 2013 when SK, the parent of SK Telecom, transformed into a holding company structure, and then in 2016, the music streaming service company was sold to Kakao.
By Baek Sang-kyung and Lee Eun-joo
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