By Kim Yoo-chul
Staff Reporter

The Fair Trade Commission (FTC) has fined NHN, the operator of the nation’s biggest Internet portal Naver, 227 million won for unfair practices.

``NHN has committed illegal practices related to online advertising in several contracts with UCC content providers,’’ a spokesperson from the antitrust agency said in a press briefing.

``As NHN is the country’s dominant Internet portal company in terms of market share and search frequencies, the company should not compromise fair competition,’’ the official said. NHN earned 48.5 percent of its sales from its search and advertisement businesses in 2006.

The FTC also ordered Yahoo Korea to correct what it said were unfair contracts with small online game providers. SK Communications was fined 125 million won, while Daum Communications and KT Hitel escaped the fines.

``We penalized Internet portals for the first time, which is meaningful. The decision will create an environment for fair competition,’’ the official said.

NHN ― concerned that the fine might drag down its share prices due to the government’s definition of the company as the industry’s dominant player ― pledged to take the issue to court, saying the ruling didn’t reflect fair guidelines.

``It is nonsense to define our company as the dominant player just because of market share and the fact that we provide composite services such as news, e-mail and games,’’ an NHN official said.

The panel began a probe of Internet portals a year ago at the request of the National Assembly to see if the market leaders had colluded in price fixing and other illegal practices mostly related to online advertising.

yckim@koreatimes.co.kr