Return to the basicsKorean big-tech names Naver and Kakao have come under political scrutiny. Bills dubbed “Online Platform Fairness Act” and “Online Platform User Protection Act” largely targeting the two dominant players are awaiting legislative approval. Few had anticipated such laws would be needed, but increasing abuses from their dominant presence have invited regulatory measures from politicians and government.
Big-tech rise can offer both convenience and danger of monopolization. Since they are two sides of a coin, the antitrust agency Fair Trade Commission has so far refrained from aiming at them.
But experts agree they have pushed the limits. There has been greater cost than convenience from their sprawling business expansion. Their business additions have been greater and faster than past chaebol entities. They have been sucking in up-and-rising start-ups through their rich cash ammunitions.
Since the two are used by most Koreans, small businesses have come under their mercy. Small and mid-sized enterprises must provide or promote their merchandises or services on Naver and Kakao so as to reach broader consumers. They must endure excessive fees or terms since they cannot sustain business without going through the two platforms.
Kakao has slowed the rise in cab call fees on its mobility platform to twice the level from its original plan of a five-fold increase after public uproar. Some taxi drivers complain that they feel like rickshaw runners, getting measly fees for their services after yielding most of their earnings to Kakao. Most Koreans get food delivered from Baemin platform, but the delivery fee increase has transferred the burden on shops and consumers. Grocery and e-commerce leader Coupang wields as much power as a large company over merchandisers.
Big-tech abuses pose as a common problem across the world. Governments have been drawing up measures to check their dominance. The U.S. is working on a strong antitrust law targeting them as their outsized influence has come to undermine competition and economy while increasing consumer burden.
Korean big-tech players must go back to their innovative foundation instead of profiteering from fees. It is their responsibility to pay for their rise and gain global competitiveness. The government also must draw up measures carefully so that its aim to reduce their abuses does not dampen their creativity and entrepreneurship.