Apple pays S.Korean user compensation over iPhone tracking-court

SEOUL, July 14 Thu Jul 14, 2011 3:21am EDT

SEOUL, July 14 (Reuters) - Apple Inc's Korean unit has paid compensation to a user of its popular iPhone after collecting location data without consent, lawyers and court officials said, the first payout by the U.S. company over these complaints.

Apple Korea agreed to pay 1 million won ($946) in compensation to Kim Hyung-suk, a lawyer, following a court order in May, two officials at Changwon District Court told Reuters on Thursday. They declined to be identified because they are not authorized to speak to the media.

Kim's law firm, Mirae Law, said Apple made payment last last month. Apple could not be immediately reached for comment in Seoul.

Mirae Law said it was now preparing a class action lawsuit against Apple for the unauthorised data collection. A website for class action sign-up has been set up but was paralyzed due to heavy traffic. (www.sueapple.co.kr)

Apple released a software update in May to fix a problem that enabled its mobile devices to collect and store customers' location data. The revelation that Apple's iPhone collected data and stored it for up to a year has prompted renewed scrutiny of the nexus between location and privacy.

U.S. lawmakers have accused the technology industry of exploiting location data for marketing purposes - a potentially multibillion-dollar industry -- without getting proper consent from phone users.

Google Inc's Seoul office was raided in May on suspicion its mobile advertising unit AdMob had illegally collected location data without consent, in the latest setback to the Internet search firm's Korean operations.

Executives of both Apple and Google have said they did not abuse the information.

Any class action may further pressure Apple in the home market of its key rival Samsung Electronics .

Samsung's flagship Galaxy S smartphone has emerged as a major competitor to the iPhone.

The iPhone is sold by top mobile carrier SK Telecom and second-ranked KT Corp in South Korea. KT, the major seller of the iPhone, said its iPhone subscribers reach more than 2.7 million, while SK Telecom declined to provide any details.

Apple sold a record 18.65 million units of its blockbuster iPhone globally in the March quarter. ($1 = 1056.800 Korean Won) (Reporting by Ju-min Park and Hyunjoo Jin; Editing by Anshuman Daga and Lincoln Feast)

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