KT, Hanaro face class-action suit

The Seoul YMCA is planning to file class-action lawsuits against KT and Hanaro Telecom for conspiring to fix local phone call rates, a week after the Fair Trade Commission imposed record fines on the two companies for the same reason. At the YMCA building in northern Seoul, a citizens’ relay group within the YMCA said that price-fixing is a “grave matter that severely undermines consumers’ rights.” The lawsuit is seeking up to 1 million won ($992) per plaintiff in damages. The YMCA will accept plaintiffs for 10 days, beginning today. Anyone who paid the higher rates or who applied for phone service from the two companies from August 2003 to August 2004 can join the suit. On Wednesday, KT, the largest fixed-line phone service provider in Korea, was fined 116 billion won by the Fair Trade Commission. Hanaro Telecom, the second-largest phone company, was fined 2.8 billion won. The antitrust agency said KT and Hanaro raised their rates for local calls in the summer of 2003 on the condition that KT give 1 to 2 percent of its market share to Hanaro. On Thursday, KT denied wrongdoing and said it would appeal. Both KT and the Information Ministry agree that the ministry ordered phone service providers to impose higher rates because the companies had been cutting them below the break-even point to attract customers. For this reason, the YMCA also said the Information Ministry is also a potential defendant. by Wohn Dong-hee