This Time Data Regulation... Fair Trade Commission's Innovation Backlash

Platform Companies Commission Research Project to Resolve Data Monopoly
Seemingly Targeting Naver... "Hindering Tech Company Growth"

[Sejong=Asia Economy Reporter Kwon Haeyoung] The Fair Trade Commission (FTC) has begun reviewing regulations to prevent data monopolies by platform companies. It views these companies as hoarding data, the source of various services, and exercising dominant positions over tenant companies, other platforms, and consumers. While there is an interpretation that this move is aimed directly at Naver, which was penalized last year for algorithm manipulation, concerns are emerging that it could also stifle the growth of nascent tech companies.

According to the FTC on the 22nd, the commission recently commissioned a research project on "Competition and Consumer Issues in the Data Sector and Measures to Establish Fair Trade Order."

Through this project, the FTC plans to review the concept and definition of data, as well as ▲supplementing fair trade and consumer legislation related to data possession and utilization ▲restrictive corporate mergers in the digital sector ▲the FTC’s role in issues of personal information infringement.

The most notable part is the "resolution of data monopolies by platform companies." The commission is focusing on measures to require tenant companies to open some of their data and to activate data mobility. It views data as a core source of tech company growth and sees monopolistic behavior as causing unfairness. Since Naver was sanctioned last year for manipulating shopping and video search algorithms and for not providing real estate information to competitors, it is widely seen within and outside the FTC as targeting Naver.

An FTC official explained, "As data becomes a core element of the digital economy, the possibility of anti-competitive and unfair acts and consumer harm is increasing. It is necessary to organize issues related to the negative effects of the rapidly growing data industry and prepare countermeasures."

However, this policy by the FTC is expected to curb not only giant IT companies like Naver but also the growth of small tech companies. Depending on the scope of data opening, it could excessively infringe on platform trade secrets or inadvertently hinder technological and service innovation. An IT industry insider said, "The digital economy differs greatly from traditional industries and corporate environments, and as competition structures change with technological changes, it should not be regulated by the existing competition law enforcement methods."

An FTC official emphasized, "The data market is growing rapidly, so this is a proactive review. No decisions have been made yet regarding whether or how to regulate."