Antitrust chief hints at tighter scrutiny of Kakao

South Korea’s Fair Trade Commission chief hinted Monday at tighter scrutiny of local platform operators like Kakao that enjoy an almost monopoly status.

Referring to the recent nationwide meltdown of Kakao services following a fire at its main data center, FTC Chairman Han Ki-jeong said there is a need to effectively correct the adverse effects of monopoly power.

“We will be revising regulations that hinder innovative companies from entering the online platform market and also regulations that excessively restrict business activities,” said Han, who was speaking at his first official press conference.

“Online platforms taking up a large proportion in the domestic economy is closely connected to people’s lives that establishing the foundation of fair competition among the industry is a must for innovation and for prevention of problems that could derive from monopoly.”

Last month, a fire at the data center caused the worst digital blackout for Kakao services, including the immensely popular messaging app KakaoTalk. It was the nation’s worst-ever data-related shutdown, prompting Koreans to rethink about their heavy dependence on a few platform operators.

As part of efforts to enhance fair competition among online platforms, the FTC chief said the watchdog will also announce a revised measure that eases business operation restrictions of current car-sharing companies within this month.

In response to the transition into digital economy, the antitrust regulator will try to protect consumers’ rights from fraudulent acts and deceptive designs, also known as "dark patterns."

“We will strictly punish those that use SNS to advertise discretely and manipulate online reviews. We will also look into establishing new measures to regulate those that use dark patterns, a user interface crafted to trick users into doing things that they didn’t mean to such as buying or signing up for something,” said Han.

The FTC would continue to keep a close eye on responding to large businesses that practice unfair intracompany dealings just like how it decided to impose fines of around 8 billion won ($5.73 million) on Hankook Tire & Technology on Nov. 8 for purchasing overpriced tire molds from its affiliate Hankook Precision Works to help the arm solidify its presence in the market.

The chairman also confirmed that there would be an organizational reform to enhance its role in investigating antitrust cases.

“In order to respond more quickly and strictly to market violations, we plan to prepare and announce a reorganization plan within this year. This is to focus on enhancing fairness, efficiency, and professionalism of the FTC’s law enforcement,” Han explained.