Fair Trade Commission Targets Google Following Naver... "Review Report to Be Sent Within the Year"

YouTube and Naver Pay Also Under Investigation

[Asia Economy Reporter Moon Chae-seok] Following the Fair Trade Commission's (FTC) crackdown on unfair practices by NAVER, a leading domestic platform, it is now targeting the overseas platform Google. This is interpreted as a strong intention to strictly sanction 'giant platforms' for abuse of power, regardless of whether they are foreign businesses.

On the 18th, the FTC announced a 'three-pronged investigation' into Google Korea, focusing on obstructing the installation of competing operating systems (OS), demanding exclusive app releases, and imposing a 30% commission on in-app payments.

Since the FTC has been investigating the obstruction of competing OS installations and demands for exclusive app releases ex officio since 2016, the level of sanctions such as indictment, fines, and corrective orders is expected to be decided within this year.

The FTC is investigating whether Google forced smartphone manufacturers like Samsung to pre-install its own OS, Android, thereby excluding competitors and establishing a dominant market position.

They are also examining whether Google coerced domestic game companies such as Nexon, NCSoft, and Netmarble to release their apps exclusively on Google’s app market, the Play Store.

Currently, popular mobile games like NCSoft’s "Lineage M" and Netmarble’s "Lineage 2 Revolution" are released only on Google Play Store and Apple, instead of domestic carriers or One Store, which was established by Naver.

The FTC is also reviewing whether Google's app payment commission plan announced on the 29th of last month is illegal.

Starting next year, Google plans to mandate the use of Google’s payment system, including in-app payments, for all content distributed through Google Play, charging a 30% commission on payment amounts.

Although no formal investigation has been launched due to the absence of related complaints, there is internal scrutiny over the legality of the 30% commission, which is being criticized as a kind of 'toll fee.'

At a recent National Assembly audit of the FTC, when Democratic Party lawmaker Kim Byung-wook pointed out that "the FTC has been investigating Google ex officio since 2016 but no conclusion has been reached," FTC Chairman Cho Sung-wook responded, "The agenda will be submitted soon."

Once the FTC sends the review report to Google Korea and submits the agenda to the full commission meeting, the final level of sanctions will be determined. An FTC official said, "We are investigating whether Google obstructed the installation of competing OS and forced game apps to be released only on its app market, aiming to submit the agenda within this year."

Chairman Cho also commented on the 30% commission policy, stating, "We believe that low market competition pressure is causing abuse of market-dominant position," and added, "We are approaching this with a structural perspective to restore market competition."

Im Jae-hyun, Executive Director of Google Korea, will appear as a witness at the comprehensive FTC audit on the 22nd regarding controversies over Google’s commission 'abuse.' Han Seong-sook, CEO of NAVER, which recently received a fine decision from the FTC, will also appear as a witness.

In addition, the FTC is tightening its reins on unfair practices by major platforms such as YouTube.

Although still in the early stages, the FTC is investigating whether YouTube arbitrarily applied the so-called 'yellow badge' to domestic YouTubers. YouTube attaches a yellow icon to content that violates its terms, which prevents content creators from placing ads on those videos.

The FTC is also investigating whether NAVER violated the Fair Trade Act by displaying only the Naver Pay logo at the payment stage. This investigation is in its final stages, and a conclusion is expected soon.