2/21/2007

FTC plans a monopoly investigation of 3 portals

JoongAng Ilbo Feb. 21, 2007

As early as next month, the Fair Trade Commission will begin investigating whether three major Internet portals, Daum, Naver and Nate, are a monopoly.“We will form a task force team and begin a direct-authority investigation on the Internet portal companies,” said Lee Dong-gyu, secretary general of the Fair Trade Commission.

The watchdog agency said it feels the influence of the top portals is growing rapidly in the market.The concern is that they are using their dominant position to overcharge content providers, such as a company that writes horoscopes.On a radio talk show yesterday on the Buddhist Broadcasting System, Mr. Lee said the Fair Trade Commission hurried up its plans to start researching the Internet portals because it considered the issue to be timely.

In the case of Naver, Daum and Nate, the three portals took more than 80 percent of all sales, mostly from advertising, in the Internet portal business. The task force team will consist of four to five people, Mr. Lee said. The Fair Trade Commission will investigate NHN, which runs the largest Web portal, Naver; Daum Communications, which operates Daum; and SK Communications, owner of Nate.In the case of Naver, people who were looking at Internet portals either stayed on that site or were looking at links from that site more than 80 percent of the time, resulting in analyst estimates that the service operator has a 70 percent share of the local market.

Regarding the Fair Trade Commission’s investigative policies, the people at Naver said they weren’t concerned. “This isn’t the first time the fair trade agency has conducted an investigation and even when the communications committee [under the Information Ministry] conducted investigations before, no unfair acts were found,” said a spokesman for Naver who declined to be named.

Naver also added that it has prepared for the Fair Trade Commission’s investigation by not using its dominant power to pressure any of the content providers.It said it set up an system a year ago where affiliated companies could report unethical practices.Content providers, however, tell another story. “Large portals give us a two or three month test period before they pay for our content and even then, we don’t get to sign an actual contract, which is very difficult for our management,” said one entertainment news provider who wished to remain anonymous. By Chang Chung-hoon JoongAng Ilbo [wohn@joongang.co.kr]

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