FTC investigates global firms for antitrust issues

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FTC investigates global firms for antitrust issues

Fair Trade Commission (FTC) Chairman Kim Sang-jo said Monday that the agency is investigating a number of global companies, including Dolby, Google and Agoda, for possible antitrust violations.

“[In regard to Dolby,] we have already conducted a field investigation following complaints raised by an official,” said the FTC Chairman Kim during the annual National Assembly audit. “The 2015 Dolby investigation looked into the contracts, but in the recent investigation, we are looking into commissions charged on patent use and cancellation charges.”

The FTC chairman said that since the issue is related to patent disputes and is thus complicated, it would take time to reach a conclusion. Kim’s comments were in response to claims by the Liberty Korea Party’s Kim Yong-tae that the FTC should investigate possible gapjil, or abuse of power, by Dolby.

The lawmaker said Dolby has demanded that their Korean partners pay royalties on technologies that these companies have developed on their own on the grounds that the technologies are based on Dolby’s. The company not only canceled contracts with these partners but also claimed damages equivalent to 20 times the royalties paid.

The FTC chairman said that the antitrust agency is also looking into Google and the hotel reservation company Agoda.

“The situation could have changed with Google since the last time, when it was acquitted,” Kim said. “In the case of Agoda, the issue is currently under review.”

Democratic Party lawmaker Jang Byung-wan asked Kim why the FTC, which promised to revisit charges against Google, hasn’t made any progress. In 2011, Korean web portals Naver and Daum claimed Google was violating the nation’s antirust laws by installing the Google search engine as well as other products, such as Google maps and YouTube, as defaults on smartphones utilizing Google’s Android operating system.

After two years of investigation, the Korean FTC acquitted Google. However, the Korean FTC’s conclusions were brought into question after the EU found Google in violation of antitrust laws in 2016. Following that judgement, the FTC announced that it would be looking into the matter again. In an interview with the JoongAng Ilbo last month, FTC Chairman Kim said the antitrust agency will likely announce its conclusions at the end of the year.

In the case of Agoda, the FTC in April told the company along with other online travel agencies - Booking.com, Hotels.com and Expedia - to change its refund policies. Agoda was the most controversial as it refunds customers with mileage points instead of cash. Despite the warning, Agoda did not make the changes recommended by the FTC.

The FTC is embroiled in controversy as its former employees have landed jobs at conglomerates illegally. During the National Assembly audit, the commission said it has decided to create a website that will disclose the reemployment status of those who have retired or left the organization.

In July, former FTC Chairman Jeong Jae-chan and former Vice Chairman Kim Hak-hyun were arrested for compelling conglomerates to hire roughly 18 retiring FTC officials.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
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