SEOUL (BLOOMBERG) – South Korea’s powerful antitrust regulator has sought to defuse fears of a broad tech crackdown as it takes action to limit the influence of its fastest growing online platforms.
Regulators will impose only the minimum regulations necessary and intervene only where it is imperative to do so, Ms. Joh Sung-wook, chair of the Korea Fair Trade Commission, told Bloomberg Television.
The agency’s priority is to prevent dominant companies in the market from abusing it and harming competition, she added.
Internet giants Naver and Kakao lost more than $ 10 billion (S $ 13.6 billion) in market value in a single day last month, amid fears of a Chinese-style crackdown on their Lucrative operations are growing ahead of next year’s presidential elections.
One lawmaker called Kakao a “symbol of greed,” echoing growing public sentiment that internet giants are driving the country’s socio-economic divide by encroaching on areas traditionally reserved for small businesses, such as the delivery of food and taxi transportation.
South Korea wants “a genuine, fair and transparent trading system and ecosystem where big companies and new entrants can grow and innovate together,” Ms. Joh said. This will ultimately benefit consumers and the industry as a whole, including big players like Kakao.
“Trust us. We are here to help you,” she added.
Internet businesses have exploded during the pandemic, but their growth has also made them the main target of government scrutiny and criticism.
The fear is that regulators in Seoul will take inspiration from Beijing’s book. China has launched a campaign to strengthen data surveillance, e-commerce and even after-school tutoring – with devastating effect.
Kakao’s founder briefly became the richest person in the country, just as his business and industry became a more pressing regulatory concern than the family conglomerates that traditionally produce South Korean billionaires and monopolies.
The country’s tough enforcement has already caused delays in Krafton and Kakao Pay’s initial public offerings, after regulators questioned their assessments.
Financial supervisors have imposed new restrictions on fintech platform operators, who must now have formal registration before selling investment comparison services.
Dominant e-trader Coupang was fined 3.3 billion won (S $ 3.8 million) by Ms. Joh’s agency in August for allegations of unfair business practices. In response to the scrutiny, Kakao announced that it would be withdrawing from certain activities, such as hairdressing reservations and salad deliveries.
South Korea has shown a willingness to take on the biggest corporations, passing a law in September forcing the mobile duopoly Apple and Google to open their mobile app stores to allow alternative payment methods.
But Ms Joh said her agency would only intervene to tackle market abuse, which is on the rise.
“As platform companies grow, some of them become monopolies of control and exploit this power, exercising a dual position of judge and actor in the market,” she said. declared. “Individual traders cannot survive without online platforms. The balance of power is upset.”
The antitrust watchdog is pushing for legislative change as existing laws fail to protect consumers and merchants on online platforms, Ms. Joh said. He wants to see a digital platform fairness law, as well as an amendment to the country’s e-commerce law that would expand the scope of the platform owner’s liability for harm to consumers.
âThese laws would mean that we wouldn’t have to actively intervene, so the impact on the industry will be minimal,â Ms. Joh said.
When asked when the new laws could be passed, she replied, âThe sooner the better.