Seongwook Cho: "Concerns Over Market Competition Restriction by Giant Platforms... Need for Reforms Reflecting Rapidly Changing Environment"

At the 40th Anniversary Academic Symposium of the Korea Fair Trade Commission

Jongwook Cho, Chairman of the Fair Trade Commission. (File photo)

[Sejong=Asia Economy Reporter Joo Sang-don] Cho Sung-wook, Chairman of the Korea Fair Trade Commission (KFTC), emphasized on the 8th, "In platform markets where monopoly and oligopoly phenomena easily occur due to network effects, the dependence of trading partners on platforms is increasing, raising concerns that giant platforms may exploit information asymmetry to restrict competition."

Chairman Cho made these remarks during his greeting at the "40th Anniversary Academic Symposium of the Fair Trade Commission" held at the Korea Chamber of Commerce and Industry on the same day, stating, "The digital economy is not entirely positive in every aspect."

He also expressed concerns about the potential abuse of platform dominance. Chairman Cho pointed out, "Giant platforms, which have become gatekeepers of the market, are abusing their superior position over tenant companies while failing to fulfill their responsibilities to consumers. The so-called 'killer acquisitions,' where innovative companies newly entering the market are merged into large corporations and thus no longer exert effective competitive pressure, is also an important issue we cannot overlook."

In response, the KFTC proposed the "Act on the Fairness of Online Platform Intermediated Transactions" in January this year. The core of the bill mandates the compulsory drafting and delivery of contracts between platform operators and tenant companies to prevent disputes. The contract must include essential details such as service content, compensation, commencement, restriction, suspension, and changes of services, product exposure, and standards for sharing damages. Furthermore, the KFTC has announced a legislative amendment to the "Act on Consumer Protection in Electronic Commerce, etc.," requiring online platforms like Naver and Coupang to distinguish between intermediary transactions and direct purchases, and to clearly indicate whether advertisements are advertisements to prevent consumers from mistaking ads for search results.

Chairman Cho explained, "The response of fair trade policies to the advent of the digital economy and the enhancement of the efficiency of competition law enforcement systems are tasks that must be discussed for the long-term development of the fair trade system. The enactment of the On-Pla Law and the amendment of the Electronic Commerce Act are efforts to supplement the fair trade system appropriately for the digital era."

The two-day symposium held on the 8th and 9th will be attended by figures from various sectors including academic societies and research institutes related to fair trade, economic organizations, civic groups, consumer organizations, and the legal community. On the first day, discussions will focus on "40 Years of Fair Trade System: Operational Performance and Future Policy Directions," and on the second day, the theme will be "Consumer Policy Directions in the Post-COVID Era."