Contract to Prohibit Providing Property Information to Partner Companies and Kakao
[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The prosecution, investigating Naver's alleged abuse of power related to real estate listing information as reported by the Fair Trade Commission (FTC), initiated a forced investigation by conducting a search and seizure on the 12th.
The Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office (Chief Prosecutor Lee Jeong-seop) dispatched prosecutors and investigators to Naver's headquarters in Bundang-gu, Seongnam-si, Gyeonggi-do, to carry out a search and seizure on charges of violating the Fair Trade Act (abuse of market-dominant position).
Naver is suspected of having signed contracts with real estate information companies from May 2015 to September 2017 that prohibited the provision of real estate listing information supplied to Naver from being shared with Kakao, the operator of the competing portal Daum.
This prosecution investigation into Naver's abuse of market-dominant position began after the FTC filed a complaint with the prosecution in November last year, following a mandatory complaint request from the Ministry of SMEs and Startups.
In December 2020, the FTC found that Naver had entered into exclusive contracts with real estate information companies to block information provision to Kakao, and imposed corrective orders along with a fine of 1.032 billion KRW.
At that time, the FTC judged that Naver, which provided listing information through partnerships with real estate information companies (CPs), blocked Kakao's market entry by changing contract renewal conditions when Kakao attempted to approach partner companies to transform its business model similarly.
In response, the Ministry of SMEs and Startups held a mandatory complaint review committee in November last year and requested the FTC to file a complaint with the prosecution regarding this case.
Article 129, Paragraph 4 of the Fair Trade Act (Complaint) states, "Even if the Fair Trade Commission decides that the conditions for complaint under Paragraph 2 (cases where the degree of violation is objectively clear and serious, significantly harming competition order) are not met, the Chairman of the Board of Audit and Inspection, the Minister of SMEs and Startups, and the Administrator of the Public Procurement Service may request the Fair Trade Commission to file a complaint for other reasons such as social ripple effects, impact on national finances, and damage to small and medium enterprises."
Paragraph 5 of the same article stipulates that when such a complaint request is made, the FTC is obligated to file a complaint with the Prosecutor General.
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