(LEAD) Regulator to vet unfair biz activity by online platforms

September 10, 2021

 South Korea’s antitrust regulator said Friday it will closely look into unfair business activity by online platform giants here amid their increased market dominance, apparently targeting Naver Corp. and Kakao Corp.

Concerns have mounted that powerful online platform operators have abused their dominant market status and engaged in unfair business practices against contractors, posing a threat to the survival of small merchants.

Joh Sung-wook, chief of the Korea Fair Trade Commission (KFTC), voiced concerns about growing “side effects” from how online platforms operate business.

“Online platforms provide new opportunities for market access, but concerns about unfair business activity linger. Consumers are given more choices, but damage on them is also on the rise,” she told a forum.

In a non-contact consumption trend, Naver and Kakao have come to have a powerful presence as they have aggressively expanded into new businesses.

In particular, Kakao has relentlessly expanded its business portfolio into many fields, ranging from the banking service, entertainment and taxi-hailing business.

The KFTC said it is investigating alleged unjust business practice by Kakao Mobility Corp., the country’s leading tax-hailing firm, and e-commerce giant Coupang.

Groups of taxi firms asked the antitrust body last year to probe into allegations Kakao Mobility deliberately gives priority to taxis affiliated with the firm for receiving calls when a customer hails a taxi with the Kakao T application.

The KFTC is also looking into allegations Coupang abused its search algorithms so its own brand products were placed on the top of its website and mobile platform. The company is also alleged to have pressed suppliers to provide goods at a lower price than its rivals.

Against this backdrop, the ruling Democratic Party is seeking to legislate a new bill aimed at regulating unfair business practices by mainstream platform giants.

Earlier, the KFTC submitted to parliament a bill designed to take punitive actions against unfair business practice by online platform operators.

Under the bill, online platforms will be levied a hefty fine if they conduct abusive or illegal business activity against contractors registered as sellers.

Separately, the National Assembly endorsed an act in August that will curb the dominance that Google and Apple exert over payments on their app stores. The move enabled South Korea to become the first nation in the world to enact such a law.