Korean bar associations fined by FTC for LawTalk ban

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Korean bar associations fined by FTC for LawTalk ban

Published: 23 Feb. 2023, 17:48

A Fair Trade Commission (FTC) official explains the commission's decision to fine the Korean Bar Association (KBA) and Seoul Bar Association (SBA) with 2 billion won ($1.5 million) for violating the Monopoly Regulation and Fair Trade Act in a briefing to the local press on Thursday at the Government Complex in Sejong. [YONHAP]

Bar associations can't prohibit members from using the LawTalk app, according to Fair Trade Commission.

The antitrust regulator said the bars must stop preventing use of the service, which lists attorneys available for work by field, and fined the Korean Bar Association (KBA) and the Seoul Bar Association (SBA) each 1 billion won ($771,000).

The associations violated lawyers rights to advertise themselves and the right of consumers to avail themselves of such advertisements by threatening to punish lawyers if they are caught using the LawTalk app to advertise themselves, according to the fair trade regulator.

LawTalk is a mobile app that connects users to lawyers by expertise, such as divorce or fraud. Users do not pay to use the app but the lawyers pay LawTalk a lump sum for advertising so that they are exposed to potential clients. Lawyers can also register themselves on the LawTalk app without paying, but then they are placed lower in the search results.

Bar associations claimed that LawTalk brokers connections between users and specific lawyers, which is illegal, and reported the app to the police and prosecution multiple times. Law&Company, which developed the app, was cleared of charges in all cases by the prosecution.

The Ministry of Justice announced in August 2021 that LawTalk does not violate the Attorney-at-law Act.

According to the FTC, its ruling was its first to prevent restrictions by organizations on the use of a service by members.

“We hope that this measure will facilitate competition among legal platforms in a market where the imbalance of data is grave, thereby improving consumer access to legal services and expanding their range of choices,” the FTC said.

Law&Company welcomed the decision in what it called a “light in the darkness” amid a falling number of lawyers registered on the app and the company’s shrinking revenue. The company once had as many as 4,000 lawyers using the app, but that number fell to 2,000, and it has been forced to cut half of the company’s staff this year.

“The pressure that LawTalk, an obviously legal service, received from the KBA and SBA was too great a burden for a start-up to endure and downright illegal,” the company said in a press release.

“Two to three million legal consumers use LawTalk a year. We ask for everyone’s support so that the people of Korea who need legal help get what they need and LawTalk keeps innovating the legal market.”

The KBA said it will appeal the decision through administrative litigation, calling the FTC’s decision as overstepping the legal authority of bar associations to maintain order among its constituents. The Attorney-at-law Act dictates that all lawyers must join the KBA and that the association has the right to regulate its members within the bounds of the law.

“The steps that the KBA has taken to penalize members for joining the LawTalk service is based on the advertisement regulations that the KBA has amended with the rights it has been vested with to revise related laws and therefore is not directly related to the Attorney-at-law Act,” the KBA said in a statement on Thursday.

“The FTC is neglecting its duties to amend laws related to making the platform market a fair one, but it’s instead stepping on the toes of other associations for trying to right the wrong made by platforms, and we will remedy the situation through legal measures.”

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]