Value context and insight. lkm@koreatimes.co.kr
Naver, Kakao faces FTC probe for alleged collusion in evaluating news outlets
Naver news page / screen capture
By Lee Kyung-min
Kakao news page / screen capture
By Lee Kyung-min
A local newspaper turned to the Fair Trade Commission (FTC) to look into whether Naver and Kakao Corp. colluded to deny a request to publish contents on their platforms, according to market watchers, Tuesday.
Naver operates the Korea's largest portal and Kakao Corp. is the operator of Kakao Talk, the mostly widely-used messenger app.
At issue is whether Naver and Kakao unduly and jointly refused to publish the newspaper's articles without clear reasons, in violation of antitrust laws.
The FTC's laws prohibit any two market players with competing interests from engaging in joint action to suddenly and unexpectedly deny business to a third party in the same market. Also prohibited is unilaterally terminating existing contracts.
Incheon-based Kyeongin Ilbo newspaper said it sought the FTC's review, Monday, challenging the two most dominant online platform operators with a combined share of 90 percent of the local news distribution market. The denied request, the newspaper said, directly hurts online readership expansion and threatens the survival of the media outlet as a business.
The FTC review was prompted by a written notice of denial sent by a news content evaluation committee jointly established and managed by the two.
In the notice, the committee said Kyeongin ilbo did not ― yet again ― make the list of news content providers that are allowed to publish stories on their platforms.
Four previous requests filed from September 2020 to October of last year were all denied.
“Any news media outlet without the help of Naver and Kakao has no alternative content distributor to increase market access,” the newspaper said in the FTC review request.
The joint action denying business to the newspaper is in and of itself an antitrust law violation, as clearly illustrated by numerous Supreme Court and Constitutional Court precedents, according to Class, a local law firm, representing the newspaper.
“Our claim carries all the more meaning and weight, because the deliberation is not limited to rights violations, but also the legitimacy of the committee long unchallenged despite its power and influence with news content creators and the public,” the law firm said.
Naver and Kakao each had a news content evaluation committee, but they merged in 2015 with an added number of outside committee members.
The merged committee ostensibly promotes fairness in evaluating and penalizing content providers, but faces continued criticism for their arbitrary interpretations and applications of related evaluation standards and requirements.