Korea's antitrust agency to regulate platform businesses' monopolistic practices

KakaoTalk and Naver app icons are seen on an iPhone. [SHUTTERSTOCK]

The Fair Trade Commission (FTC) is proposing a bill to prohibit platform operators from limiting competition by limiting users' access to competing services, a decision that provoked opposition from Korea's business associations and tech industry.

The antitrust regulator announced on Tuesday that it will introduce the bill after discussions with related government agencies, without further details on the target or penalties of the regulation.

“Such platforms are quickly amplifying their influence in the market through unfair business practices such as prohibiting startups or other platforms from entering the market,” FTC said in a statement.

“The platforms’ monopolistic practices are putting burden on the consumers due to increased commission charges or subscription fees."

For example, the FTC alleged Google is prohibitng game publishers that launched games in Google Play Store from releasing the games in other app markets such as One Store, another Android app store created by Korea’s three mobile carriers and tech giant Naver.

Another instance the FTC cited was Kakao’s ride-hailing affiliate Kakao Mobility, which manipulated ride dispatch algorithm to favor its affiliated drivers above others.

Industry sources said services run by Google, Naver and Kakao could be subject to the proposed billl.

The commission said that it will label few large-scale platform operators which can wield considerable influence in the domestic market as “dominant platform operators” and prohibit them from engaging in unfair practices such as favoring its affiliates and preventing multi-homing.

Multi-homing refers to a situation where users simultaneously connect to multiple platforms.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]