South Korea's antitrust watchdog said Sunday that it has fined KT Corp. and LG Uplus Inc. a combined 6.2 billion won (US$5.6 million) for undermining fair market competition by excessively lowering prices of their corporate messaging services.

KT and LG Uplus were fined 1.9 billion won and 4.3 billion won, respectively. The amount is preliminary and will be adjusted later after calculating related sales, according to the Fair Trade Commission (FTC).

The two major mobile carriers are accused of taking advantage of their own communications networks to excessively lower the prices of their corporate messaging services, forcing out smaller competitors from the growing market. 

Smaller companies have to borrow the networks from the mobile carriers to send messages, which cost an average of 9.2 won each.

KT and LG Uplus set the prices of their own corporate messaging service below cost, FTC said.

The corporate messaging services allow companies send clients messages such as notifications of credit card payment or updates on product delivery. As of 2013, the market was worth 440 billion won. 

Of the three major mobile carriers, KT and LG Uplus offer corporate messaging services, which had long been dominated by smaller companies.

In 2006, smaller companies commanded 71 percent of the market, while the two mobile carriers took up a combined 29 percent. Last year, however, the market share of KT and LG Uplus rose to 71 percent, the FTC said. 

"This case is meaningful in that we have helped level the playing field and created a market condition where competition on merit can be possible," the FTC said. (Yonhap)