YouTube Dominates Domestic Online Video Market
Yet Google Executives Absent from National Assembly Audit Session
[Asia Economy Reporter Jin-gyu Lee] There are concerns that domestic platform services may face reverse discrimination after the Fair Trade Commission imposed comprehensive fines on Naver services. As seen in the case of YouTube, which dominates the online video market, internet services transcend national borders, yet the government is imposing regulations limited to the domestic market.
Last month, the Fair Trade Commission fined Naver Real Estate 1.032 billion KRW for violating the Fair Trade Act by blocking information provision to Kakao. On the 6th, it imposed an additional fine of 26.7 billion KRW, accusing Naver of altering shopping and video search algorithms to favor itself without informing competitors.
On the 10th, an industry insider pointed out, "It is unreasonable to judge market dominance solely based on the domestic search market when the use of global internet services is increasing." He added, "Given that global online video services (OTT) like YouTube and Netflix are encroaching on the domestic market, it is questionable whether market dominance can be determined by portal search rankings."
In fact, global OTTs such as Netflix and YouTube hold an 80% market share domestically, while native OTTs like Wavve and Naver TV lag behind with around 20%. According to mobile big data platform company IGAWorks, YouTube's monthly active users (MAU) exceeded 43.19 million, which is about 83% of South Korea's total population. Notably, YouTube's average monthly usage time per user is 29.5 hours, more than twice that of Naver's 10.2 hours.
Naver explained the video search overhaul by stating, "In 2017, as video consumption surged, the search paradigm shifted from text to video search. At that time, YouTube provided users with desired search results even for long and complex queries, which changed Naver users' search behavior." They added, "The Naver video search overhaul was an effort to provide optimal search results to users. At that time, YouTube dominated the video market, reducing the market share of all other operators, and Naver's search users were desperately moving to YouTube."
They further stated, "Under these circumstances, the overhaul was not intended to favor our own videos but was the result of efforts to provide better search results to users." They claimed, "Even after the search logic overhaul, Naver TV's market share continued to decline, while YouTube's share kept rising." They also emphasized, "Showing results that align with users' search intent is the essence of search services," expressing regret that the Fair Trade Commission made a decision that fundamentally infringes on business activities without sufficient review.
Meanwhile, at the National Assembly's Science, Technology, Information and Broadcasting Committee audit held on the 7th, Nancy Mable Walker, CEO of Google Korea, and John Lee, President of Google Korea, did not appear despite controversy over the 30% mandatory commission on Google Play. In this situation, opposition lawmakers did not raise particular issues about the absence of Google executives but instead called for investigating allegations of algorithm manipulation by domestic portals, demanding that Lee Hae-jin, Naver's Global Investment Officer (GIO), be summoned to the audit. An industry insider said, "Global IT companies exploit loopholes in domestic laws, ignoring government or National Assembly summons, resulting in improper application of domestic regulations and causing reverse discrimination between domestic and foreign companies."
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