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Portal monopoly: Naver,Daum, Nate too powerful?

Feb 22,2007
Controversy is growing on whether major Internet portal sites are a monopoly in the market and, if so, if they are abusing that position. Portals are being accused of unfair use of Internet content and price-fixing.
A day after the Fair Trade Commission announced that it would launch an investigation into three major portals (Naver, Daum and Nate) to examine the issue, an open discussion was held at the National Assembly yesterday.
The first issue brought up was whether the three portals are a monopoly.
Jeong Hae-deok, an attorney, said that in 2005, revenue at the three portals, mostly from advertising profits, accounted for 87 percent of what all portals made. According to Korean fair trade laws, if one company has 50 percent or more of market share, or if up to three companies hold more than 75 percent of the market, it is considered “dominant” market share and thus becomes subject to fair trade regulations.
The portals, however, reason differently. They argue that the Internet portal business is something without boundaries, and since Yahoo and Google are also in Korea, it is not fair to say they are a monopoly by comparing them with domestic firms. The Internet Business Association, a group of 176 member companies, also pointed out that Internet portal companies offer a variety of services, including search engines, games, e-mail and news, and that it is not right to put them into one category.
The news brought up some ill feelings among content providers, who accused portals of abusing their dominant power to create their own database.
The Korea Internet Content Union, comprised of blog service operators, news agencies and other companies that publish content on the Internet, said portal sites should only be search engines and provide external links for content that they have not paid for. Currently, most portal sites pay major newspapers to re-publish articles on their Web sites, but they do not have paid contracts with most of the other companies, the union claimed. For instance, on Naver, linking to a blog entry on another blog site will not take the user to the other site, but allow the user to read the blog entry within Naver’s web interface. Other firms said the three sites require the same amount of money for firms to register Web sites on the portals and suggested that this may be price-fixing.


By Wohn Dong-hee Staff Writer [wohn@joongang.co.kr]



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