Yeong-Ju Lee, Soo-Jung Yoo, Journal of Internet Computing and Services, Vol. 13, No. 1, pp. 27-36, Feb. 2012
10.7472/jksii.2012.13.1.27, Full Text:
Keywords: offering of promotional gifts, exemption of charges, user discrimination, user's interests, fair competition

Abstract

This study aims to find out the effectiveness of regulation of promotional gifts and exemption of charges by analyzing the judgement criterion of illegality and the corrective action taken by regulatory agencies and suggests effective way of regulation. The results show that recently the differences of price-cut is getting bigger. In addition, Fair Trade Commission has considered discounts as unfair predatory price only if price is below the cost. But in the telecommunication business law enacted by Korea Communications Commission, 'expected profits per subscriber' has been applied as a key criterion. KCC's criterion is based not on the expected profit of individual service provider but on the averaged profit of services providers. It doesn't consider differences of service quality and the cost structure between dominant firm and late comers. Prohibition act of user discrimination result in the increase of subscriber and operating profits of late comers but this is not direct purpose of regulation. It can be desirable in the aspect of fair competition but since it may reduce consumer welfare, the criterion needs to be reconsidered.

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