Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
REPORTERSNOTEBOOK Antitrust watchdog catches flak for 'reverse discrimination' against Korean firms
Fair Trade Commission Chairman Han Ki-jeong speaks during a press conference at Government Complex Sejong, Feb. 17. Yonhap
By Lee Min-hyung
The Fair Trade Commission (FTC) is catching flak for showing a “way too lenient” attitude toward foreign companies while failing to maintain consistent regulatory standards for their Korean counterparts.
The antitrust watchdog is often described as a "conglomerate sniper," but its latest sanctions on overseas tech firms are drawing questions over the label.
The FTC recently accepted a proposal from Google Korea to rectify its unfair business practice by unbundling YouTube Music from its YouTube Premium subscription service. The company also offered to provide 30 billion won ($21.8 million) as part of its self-correction measure, apparently aimed at avoiding regulatory risks from the FTC.
The long-delayed investigation into the unjust business practice appeared to have closed without any punitive measures.
However, the leniency has not been extended to local firms. Last year, the watchdog slapped Coupang with massive fines of 162.8 billion won, citing the e-commerce firm’s alleged algorithm manipulation when selling its own private-branded products on its platform. The fines marked a record high among e-commerce firms.
Earlier this year, the authority also imposed fines of some 114 billion won on the nation’s three mobile carriers for colluding to adjust the numbers of their subscriber changes.
The FTC is continuously mired in controversy over the alleged reverse discrimination against local firms while taking a less punitive stance toward U.S. firms in particular.
This tendency is especially pronounced these days, as Korea is now in high-profile trade talks with the U.S. over the latter’s imposition of a 25 percent tariff on Korea’s major export items, such as steel and automotive parts.
It is understandable that the FTC has to walk on eggshells around the United States, as the tariff shock, if protracted, may pose a serious threat to the domestic economy due to the country’s export-reliant structure.
Despite the external risks, the FTC cannot avoid criticism over its stern regulatory standards for Korean firms, which continue to protest the "unfair" stance.
“Even if the authority has to minimize any possible trade risks with minimal sanctions on U.S. firms, Korean counterparts should not become alternative targets for regulation,” a conglomerate official said.
When any authorities slap sanctions, they need to maintain policy consistency to justify their punitive actions, according to the official.
“Many argue that YouTube’s cross-sales of its music and video streaming services helped the platform strengthen its market dominance at the cost of domestic music streaming services,” the official said.
“It is questionable whether the authority would have taken a similar stance if YouTube was operated by Korean firms.”
Starting this year, the FTC reiterated its strong willingness to impose a harsh level of sanctions on platform firms for any unfair business practices. However, the latest decision on YouTube raises doubts on its sincerity.