BUSINESS

FTC sets up special team to probe Naver, Google

By Shin Ji-hye

Antitrust watchdog to examine abuse of market dominance

  • Published : Nov 19, 2019 - 15:58
  • Updated : Nov 19, 2019 - 16:07

South Korea’s antitrust watchdog is set to investigate unfair business practices by dominant tech firms -- both local and foreign -- through a new special task force team, according to officials Tuesday.

The nation’s largest search engine firm Naver is likely to become the first target, they noted.

Led by Fair Trade Commission Secretary-General Chae Kyu-ha, the 15-member team will examine separate categories -- online platforms, mobile services and intellectual property rights.

The online platform subcommittee will monitor whether the operators, such as Naver, Daum and Google, wield their control over adjacent or downstream markets through discrimination or exclusive dealing, meaning disallowing their partners to do business with rivals. 

(Yonhap)


The mobile services team will check whether firms which enjoy a monopoly, such as Samsung and Apple, hinder competitors from entering the market through a tie-in sale or exclusive dealing.

The intellectual property section will probe whether a patent holder prevents new entrants or improperly charges royalties.

The launch comes after the US Federal Trade Commission set up a similar task force in February this year.

Chae said the team would closely look into some cases of online firms allegedly utilizing their platforms in favor of their business expansion and preventing their partners from trading with other competitors using their market dominance.

The FTC said Monday it has sent a review report to Naver, stating that it appears to be abusing its superior position. It suspects that the firm discriminates in favor of its own services, such as its shopping, real estate and video services, by excluding competitors.

According to the antitrust watchdog, Naver places its services -- for shopping and real estate -- at the top of its search engine. It also said the internet giant does not inform subscribers that they are “advertisements.”

The FTC is set to finalize sanctions after collecting opinions from company officials. The trial date has not yet been fixed yet.

Under the Fair Trade Act, a company that abuses its dominant market status can be fined up to 3 percent of related sales. Naver’s share in the search market is over 70 percent here.

The special team’s next target is likely to be Google, according to industry watchers.

The authorities are looking at Google Korea, suspecting that it discriminates against other operators by overusing its Android operating system dominance. The company is accused of forcing Korean mobile game developers and retailers to release their apps only in its app market, Google Play Store. 

By Shin Ji-hye (shinjh@heraldcorp.com)


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