[Preview of Science and ICT Committee Audit①] Virtually a Nekao Audit... Focused on Platform Criticism

[Asia Economy Reporter Joesulgina] This year's National Assembly inspection is expected to become the so-called Neka-o (Naver + Kakao) inspection. This follows the anticipated course after the Euljiro Committee announced it would focus intensively on platform abuse issues. Besides the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee (STIBC), other standing committees are also expected to put the monopoly and abuse problems of these platform companies under scrutiny.

According to related industries on the 20th, the STIBC inspection will be conducted on the Ministry of Science and ICT on the 1st of next month and the Korea Communications Commission on the 5th. With the platform inspection virtually announced, it is expected that lawmakers from both ruling and opposition parties will focus their questions intensively on the sprawling expansion strategy of the giant Kakao, which has 119 affiliates.

This is because, amid the increased difficulties faced by self-employed and small business owners due to COVID-19, claims are mounting that Kakao's platform monopoly is causing side effects such as increased commission fees. Kakao Mobility recently attempted to raise smart call fees up to 5,000 won but withdrew the plan due to severe backlash. Strategies to enter neighborhood markets such as hair salons and screen golf have also come under fire.

The possibility of Kim Beom-su, Chairman of Kakao, appearing before the National Assembly this year has increased after his witness adoption failed last year. The STIBC has applied for Kim Beom-su, Chairman of Kakao, Ryu Geung-seon, CEO of Kakao Mobility, and Lee Hae-jin, Global Investment Officer (GIO) of Naver, as witnesses for the Ministry of Science and ICT inspection scheduled for October 1st.

Besides Neka-o, Google (Kim Kyung-hoon, President of Google Korea), Facebook (Jung Ki-hyun, CEO of Facebook Korea), and Apple (Yoon Gu, President of Apple Korea), who have been embroiled in continuous platform operator abuse controversies, have also been named as witnesses for the STIBC. Since the 'Google Abuse Prevention Act (Amendment to the Telecommunications Business Act),' which prohibits the forced in-app payment by application market operators, was passed for the first time in the world, related inquiries are expected.

Furthermore, criticism of free-riding on networks has been directed at Netflix, and attacks on Walt Disney, Netflix's competitor and soon-to-launch OTT service (Disney Plus) in Korea, are also expected to continue.

However, as the National Assembly announces a large-scale platform inspection and rushes to summon ICT industry leaders, concerns are raised that it could again become a 'disciplinary-style' inspection. This is because the moves blatantly target platforms used by the entire population ahead of next year's presidential election. Ultimately, it is predicted that the inspection will escalate into a political inspection aimed at winning votes, crossing the line with public opinion-driven criticism.

Looking at the recent list of witness applications, both ruling and opposition parties appear to adopt a 'call first, ask later' approach to witness selection. In Kakao's case, it has been summoned not only by the STIBC but also by the Industry, Trade and Energy Committee, the Political Affairs Committee, the Land, Infrastructure and Transport Committee, and even the Oceans and Fisheries Committee. Platform companies also show a disheartened expression. They say their social contributions, which led the fight against COVID-19 last year and this year, are not being recognized, and the offensive is only framed as 'abuse.'

An industry insider said, "There is concern that it will become a 'scolding inspection' that fails to address the actual conflict of interest between companies and consumers and instead makes companies a mere prop," adding, "It could only spread a negative image of platform companies, which have become new growth engines."

Another industry insider pointed out, "It is true that platform companies have grown rapidly during the digital transformation process and that there are side effects," but added, "Rather than an offensive aimed at winning votes or a shaming inspection, it is a priority to recognize the efforts platform companies have made to solve problems and find solutions together."

Additionally, this year's STIBC inspection is expected to discuss major issues such as the conflict over paid broadcasting content fees between CJ ENM and telecom companies, which led to an unprecedented transmission suspension incident; measures to protect internet platform users; the status and policy direction of 5G 28GHz base station construction; the situation in the budget phone market, where subsidiaries of the three major telecom companies are dominant; and the establishment of AI ethics foundations, which was highlighted by the Iruda incident.