The law restricting smartphone subsidies was scrapped Tuesday, lifting caps on device subsidies and allowing retailers to freely offer additional discounts.

Telecom companies are no longer required to publicly disclose subsidy amounts, and previously banned practices like paybacks are allowed if clearly stated in contracts.

Introduced in 2014, the Mobile Device Distribution Improvement Act capped in-store discounts at 15 percent above official telecom subsidies to promote fair competition and curb excessive discounting that had led to price discrimination and market instability.

The change is expected to spark intense short-term competition among carriers, although its long-term effects may be limited due to budget constraints and a shift toward artificial intelligence and other new business areas.

The government will rely on voluntary self-regulation and administrative guidance until a revised enforcement ordinance is approved.

Industry watchers say upcoming device launches, including Samsung’s Galaxy Z Flip 7 and Apple’s iPhone 17, will test the new market environment.