Apple Inc's South Korean unit has been fined 3 million won ($2,855) by the country's communications regulator after the iPhone and iPad maker collected location data from users without proper authorization.

The fine, though small, marks the first time Apple has been punished by a regulator over the controversial location data collection which has sparked criticism in the United States and elsewhere.

The revelation in April that Apple's iPhones collected location data and stored it for up to a year -- even when location software was supposedly turned off -- has prompted renewed scrutiny of the nexus between location and privacy.

Apple has since issued a patch to fix the problem.

Some 27,800 South Korean iPhone and iPad users are planning to launch a class action suit against Apple over the matter, while two separate U.S. groups have sued Apple, alleging that certain software applications were passing personal user information to third-party advertisers without consent.

The Korea Communications Commission (KCC) ordered corrective measures on the South Korean operations of Apple and Google Inc, saying it has found loopholes in systems supposed to protect location information. It ordered the technology giants to encrypt location data stored in smartphones.

Apple Korea could have had its business suspended or been fined 3 percent of its location information revenue for failing to encrypt location data, or been fined up to 10 million won for collecting data without permission, the KCC said.

Apple is not tracking the location of your iPhone. Apple has never done so and has no plans to ever do so, said Steve Park, a spokesman for Apple Korea.

Google Inc, a fierce competitor of Apple in mobile computing, has also faced criticism over reports that Android-based phones track the locations of users.

Google said that location-sharing on its Android mobile platform was strictly opt-in.

We are currently reviewing the KCC's decision, Google Korea said in a statement. We have been cooperating closely with the KCC to answer their questions, and look forward to continuing to work with them in the future.

In June, Apple paid a Korean lawyer 1 million won in a court ruling regarding its location data collection, the first payout by the U.S. tech giant over these complaints.

The lawyer, Kim Hyung-suk, is leading the class action against Apple, seeking 1 million won in compensation for each of the 27,800 iPhone and iPad users who applied to join the suit.

I am planning to file the lawsuit by next week, Kim told Reuters on Wednesday.

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.

($1 = 1050.850 Korean Won)

(Reporting by Hyunjoo Jin and Ju-min Park; Editing by Lincoln Feast)

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