ED Naver's foul play

Biggest search engine in credibility crisis for manipulating algorithm

Naver, the nation's biggest search engine, has been dealt a heavy blow by the government's antitrust agency for allegedly manipulating search algorithms in favor of the company's online shopping site. The Korea Fair Trade Commission said Tuesday it had discovered Naver made such algorithmic changes at least six times between 2012 and 2015 and imposed a fine of 26.7 billion won ($22.9 million) on the company along with a correction order.

According to the commission, Naver manipulated search algorithms that lowered the rankings of goods sold by competitors in February 2012, two months before the company launched its online shopping service. In June 2015, Naver also tweaked its algorithms to show more search results for goods and services when linked to the company's payment service, KFTC said. As a result of these acts, Naver's shopping platform's market share soared to 21.1percent in 2018 from 4.9 percent in 2015.

Given KFTC's allegations are true, Naver will likely be unable to avoid a serious credibility crisis by hurting fairness and deceiving consumers taking advantage of its near-monopolistic power in the domestic search market. Naver's acts did not stop at pulling down the market penetration rate of rivals but went as far as to keep consumers from making the best choices. The company should realize that its market dominance could prove to be short-lived if consumers begin to doubt its credibility.

The tech giant said it would “dispute KFTC's decision in court,” claiming the changes as pointed out by KFTC were the result of efforts to provide optimal search results based on users' diverse needs. However, one can't help but harbor reasonable doubt after watching Naver's market penetration rate jump while those of its competitors fall in the wake of the algorithmic changes.

The abuse of market dominance is bound to hinder the maximizing of consumer benefits through fair competition. Fair competition is impossible in an uneven playing field, which distorts the results of hard work. The ongoing fair trade dispute should serve as an occasion for all economic players to reaffirm unfair competition can never be tolerated in this world where fairness has become the zeitgeist of the time.