[2021 National Audit] Lee Hae-jin of Naver: "Domestic Platform Regulations May Cause Disadvantage in Competition with Overseas Companies"

[Image source=Yonhap News]

[Asia Economy Reporters Kang Nahum and Boo Aeri] Lee Hae-jin, Global Investment Officer (GIO) of Naver, said that platform operators have a "great fear that strict regulations might hinder competition with overseas companies and cause them to lose the market."

On the 21st, Lee appeared as a witness at the National Assembly's Science, Technology, Information and Broadcasting Communications Committee comprehensive audit and responded to a question from Yoon Young-chan, a member of the Democratic Party of Korea, asking, "What do you think about the intensity of platform regulations in Korea?"

He said, "Users choose brands regardless of borders, so competition with overseas companies is taking place," adding, "Rather than Kakao and Naver monopolizing the domestic market, overseas companies such as YouTube, Instagram, Netflix, and TikTok are entering and encroaching on the market, and we are losing market share."

Lee GIO continued, "From the perspective of coexistence, we must humbly accept and consider regulations," emphasizing, "Although market capitalization is growing, we are generating less profit than telecommunications companies, so we need to continue R&D, acquire startups, and make new investments."

When asked how domestic platform operators should compete globally, Lee GIO said, "I think it is a very difficult battle," adding, "We invest 25% of our revenue in research and development (R&D), but the scale of costs cannot compare to large companies, so we have many concerns. We need to quickly expand webtoon and metaverse services overseas."

Lee GIO also expressed concerns that regulations against overseas big tech companies, such as the 'Google Gapjil Prevention Act,' could spread to domestic platform regulations. He said, "Even during COVID-19, Naver and Kakao were able to contribute to various responses because they had domestic services," adding, "I worry that regulations targeting American companies might turn into regulations against domestic companies, causing reverse discrimination."