Naver fined for kicking out Kakao in realty service

By Nam Hyun-woo

Web portal giant Naver has been fined for unfairly preventing real estate information providers from signing content providing deals with the firm's rival Kakao, according to the antitrust agency, Sunday.

The Fair Trade Commission (FTC) imposed a 1 billion won ($840,700) fine on Naver for placing an article excluding other online platforms in its contracts with real estate information providers.

According to the FTC, Kakao in February 2015 attempted to sign content providing deals with seven out of eight real estate information companies providing content to Naver.

After acknowledging this, Naver told the companies that it would include an article prohibiting them from providing information on properties confirmed by the real estate verification center at the Korea Internet Self-governance Organization to other online platforms. Following this, content providers turned down Kakao's proposals in order to maintain their deal with Naver, which the FTC said is one of the most dominant online real estate information platforms in Korea.

In May 2016, Naver strengthened its exclusion with the content providers further, by adding an article allowing it to cancel contracts if realty firms provided confirmed property information to other online platforms.

As Kakao again attempted to sign content deals with real estate information firms in 2017, Naver forced the content providers to stop providing information on all properties for three months.

Due to the series of unfair actions, the FTC said Kakao was excluded from the online real estate service market. Since April 2018, Kakao has been outsourcing its real estate service to an app-based real estate firm, Zigbang.

After Kakao was effectively removed, Naver consolidated its market control, limiting consumers' choice.

Naver refused to accept the FTC ruling, claiming it did so to protect its rights by preventing Kakao from abusing Naver's intellectual property.

In a statement, Naver said it invested “billions of won” to introduce the system on providing information on confirmed properties in 2009, and has two patents regarding it. The web portal said it invited its competitors to join its effort to set up the system, but ended up establishing it alone as the rivals refused to do so.

“The FTC ruled Naver's legitimate exercise of its rights illegal, turning a blind eye to the company's efforts toward innovation,” Naver said. “The company will seek legal measures to protect its rights.”