Korean Government Moves Closer To Legislation That Limits Naver’s Tightening Grip On Korea’s Online Search Market
9월 30, 2013

As Korean President Park Geun-hye pushes to promote fair competition in the Korean economy (currently dominated by a small number of family-run conglomerates), the country's number one internet company, Naver, has been coming under fire again for allegedly abusing its power.

Naver's Rise To Power

Naver's Rise To Power


Startup "Memo This" developed a service that allows users to stick memos on any website for use by anyone who vistits the site at a later date. The theory is to allow users the opportunity to easily search related content, or view comparative services. For instance, a user might post a link to an Apple iPhone 5 ad next to a Samsung Galaxy add, so the two could be compared.
The startup company that developed this service says got off to a great start in 2009 after acquiring a number of overseas patents, but Naver eventually shut them down, saying only that the company "disrupted Naver's business model".
"There's no point in coming up with an innovative service if there's no way to reach the consumers. We've been stripped of our chance to compete fairly," a spokesperson from the startup said.
Naver's dominant position over the web in Korea gives it a huge amount of control over who operates on the portal and what they are allowed to do, and this is not the first time that the company has been charged with actions that fly in the face of fair competition. It is not surprising that Naver's profits have soared, spiking at over $2Bn last year.
But lately, the company has become the center of public scrutiny, after being accused of abusing its power. Under President Park Geun-hye's drive to foster a fairer business environment for smaller businesses, the Fair Trade Commission launched an investigation into Naver for anti-competitive practices, and the ruling Saenuri Party is to introduce fresh regulation to curb Naver next month.
"NHN declined repeated requests for an interview, merely reiterating what CEO Kim Sang-hun said earlier this week. He vowed to continue to work closely with related government officials, but also said he hopes the government does not rush to create regulations that could limit the company from competing globally.

Edited from original article in Arirang News

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