NHN succumbs to pressure on fair trade

NHN, the operator of Korea’s most popular search portal Naver, bowed to mounting public criticism Monday, saying it would seek co-prosperity with small and medium-sized market players.

Speaking at a news conference, CEO Kim Sang-hun announced a road map to pave the way for a “fair” Internet business environment.

“In recent days, we have pondered over what we have been missing and what we need to accept,” said CEO Kim, adding “Naver will do its utmost to cooperate and communicate with partners. Setting up a committee for co-prosperity and another for supporting venture businesses will be the starting point.”

His announcement came amid heightened criticism from not only small entrepreneurs that supply online content to the Internet giant but also political circles working on regulations to rein in the Internet giant.

The firm has been accused of encroaching on a wide array of business domains such as real estate brokerage, Web-based cartoons, games and online shopping.

The company is under investigation by the Fair Trade Commission, the nation’s antitrust regulator, for allegedly unfairly wielding its power in business transactions.

The home-grown Web-portal, accounting for around 75 percent of the domestic market, has been accused of exploiting its dominant influence by taking too much in commission fees for advertising and illegally copying services offered by small online content developers.

In a news conference, Kim promised to introduce a system to evaluate the possible impact of certain Naver services on other business players and the market, and a standard contract that ensured fair deals with content providers.

He said NHN would gather 100 billion won in funds to support venture start-ups with innovative ideas, create a healthy business environment, and promote cultural content.

He also promised to change marketing tactics that overwhelm computer screens with advertisements instead of displaying search results for Internet users.

Kim said “Naver would clearly differentiate search results from advertisements.”

Despite the company’s pledges, critics suspect that the firm hurriedly came up with the measures after receiving a lot of flak from social and political groups.

“(I) will wait and see for a while” said Rep. Kim Young-tae from the ruling Saenuri Party, who is leading a move to introduce antimonopoly rules against Naver, adding “The party is currently working on the rules.”

Daum, the second largest Web-portal, said it would be inappropriate to comment on its rival’s co-prosperity measures announced Monday.

“Daum will continue cooperating with Naver and other portals such as stemming pornography on the Internet,” a Daum official said. “Daum is also discussing the same issues that Naver has encountered such as those advertisement issues,” the official said.

Some market experts siding with NHN said the government and political circles should be cautious in reining in the largest Web-portal operator, which is often praised as a crusader against international Internet giant Google.

By Kim Young-won (wone0102@heraldcorp.com)