[Newsmaker] FTC expands probe into NHN’s dominance

NHN, Korea’s biggest search engine operator, is coming under mounting pressure by state regulators as the country’s antitrust agency has further expanded its probe into not only the company but also its subsidiary.

The Fair Trade Commission has reportedly launched an additional investigation into NHN Business Platform, a wholly-owned search advertising operator of NHN.

NHN has increasingly been in the spotlight lately following the FTC’s full-scale probe into the company to find out whether it abused its dominant market position against smaller online advertisers and partners.

 

Broadcasting news clips played anonymous recordings of such partners saying that they had allegedly been pressured by NHN over advertising fees. Some claimed that NHN often outright ignored advertising offers if they did not match the search engine’s demand.

This along with its dominant power of search engine Naver, which holds a more than 70 percent market share, pushed regulators to look into the “search dinosaur,” despite losing a court battle with NHN in the past.

Things are about to change amid a nationwide move of promoting economic and business fairness in the country where President Park Geun-hye’s key ministers and regulators are coming out and openly warning against any abuse of power by conglomerates.

Science, ICT and Future Planning Minister Choi Mun-kee expressed his uneasiness toward NHN, which seemed only interested in expanding and controlling the online ecosystem, and not being socially responsible amid the ongoing probe.

FTC chairman Noh Dae-lae also said that regulators will no longer stand by idly to big businesses hurting small and medium enterprises and venture firms, which could hinder the development of a creative economy.

This social escalation against big businesses has led regulators such as the FTC to investigate NHN and NHN Business Platform to find any evidence of preferential treatment toward the subsidiary in business transactions between the two sides.

By Park Hyong-ki (hkp@heraldcorp.com)