ED Naver's foul play

Korea's biggest search engine hit for manipulating algorithm

Naver, South Korea'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 (KFTC) said Tuesday it had discovered that Naver made such algorithmic changes at least six times between 2012 and 2015. It imposed a fine of 26.7 billion won ($22.9 million) on the firm along with a correction order.

According to the commission, Naver manipulated search algorithms that lowered the rankings of goods sold by its competitors in February 2012, two months before it 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, the KFTC said. As a result of these acts, Naver's shopping platform's market share soared to 21.1 percent in 2018 from 4.9 percent in 2015.

Following the KFTC's action, Naver will be unable to avoid a credibility crisis for 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 its 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 question its credibility.

The tech giant said it would “dispute the KFTC's decision in court,” claiming the changes as pointed out by the KFTC were the result of efforts to provide optimal search results based on users' diverse needs. However, one cannot help but harbor reasonable doubt after watching Naver's market penetration rate jump while those of its competitors fell 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 on an uneven playing field, which distorts the results of hard work. The ongoing fair trade dispute should serve as an occasion for all players to recognize that unfair competition will never be tolerated in a world where fairness has become the zeitgeist of the time.