Naver investigated by the Fair Trade Commission for unfair practice

The company operating the web portal Naver, NHN, has been under observation by the Korean government over the course of the past three months due to allegations of unfair business practices.On 13 May, the government’s antitrust agency eventually raided NHN’s headquarters in Gyeonggi-do based on suspicious acts carried out by the nation’s biggest web portal observed by Korean officials.

 The second raid on Naver since 2008

The raid on NHN headquarters is not the first Naver has experienced, the search giant was investigated and later fined 277 million won in 2008.

The company were found to be abusing their position as market leader by preventing a new video content provider from entering the market. However, NHN were able to dodge the fine as the FTC were unable to prove them guilty.

The recent raid this month is aligned with the new “economic democratization” campaign of the Korean government.

This campaign’s ultimate goal is to create a sound market that protects small businesses and customers, and is specifically aimed at big companies abusing their dominance in their respective markets.

Implications for the Korean Search Engine Market

 The Anti-Monopoly Bureau are to determine whether Naver’s business practices hindered small and medium-sized content providers from entering the market, and whether consumers were negatively affected by that.

It was also reported that a bill regulating large online players may be discussed in parliament soon.

These latest developments and actions taken by the government might shake up the search engine market in Korea which is currently monopolized by Naver.

The results of the investigation and future actions taken by the government in the wake of the “economic democratization” campaign within the Korean online market might bring substantial future change to the industry.