Fair Trade Commission Chairman Government Inauguration 2nd Anniversary Talk
"Platform Monopoly Difficult to Restore Competition... Legislation Needed"
The Fair Trade Commission (FTC) revealed that fines collected from companies engaging in unfair practices during the first two years of the Yoon Seok-yeol administration surged by approximately 160% compared to the initial two years of the previous government.
On the 16th, the FTC announced that the total amount of fines imposed on violators during the two years since the Yoon administration began (May 10, 2022 ? May 9, 2024) reached 929.2 billion KRW. Compared to the first two years of the previous administration (May 2017 ? May 2019), the fine amount increased from 575.3 billion KRW by about 160%.
Regarding this, the FTC commented, "This is the result of corrective actions taken in key industries driving our economy such as steel rebar, semiconductors, and construction, as well as sectors closely related to citizens' daily lives including private education, transportation, app markets, vaccines, gaming, and furniture."
Significant achievements were also made in directly remedying damages to companies and consumers caused by unfair practices. Last year, the dispute mediation success rate reached a record high of 79%, with mediation amounts totaling 122.9 billion KRW.
The FTC evaluated that since the organizational restructuring in April last year, which separated policy and investigation functions, there have been positive outcomes such as increased case processing speed.
According to the FTC, the total number of cases handled last year was 2,084, a 14.6% increase from the previous year (1,818 cases), and the average case processing period was 172 days, a 22.2% reduction from the previous year (221 days). Furthermore, by focusing on managing long-term and near-statute-of-limitations cases, the number of long-term cases and near-expiration cases decreased by 58% and 85%, respectively.
Regarding future major work directions, the FTC plans to re-push the enactment of the 'Platform Act (Platform Fair Competition Promotion Act),' which had been reconsidered from scratch due to industry backlash. To this end, various alternatives are being reviewed for controversial pre-designation systems, and academic symposiums are being held to gather broad opinions from academia and experts.
At a press briefing held on the occasion of the Yoon Seok-yeol administration’s two-year anniversary, FTC Chairman Han Ki-jung emphasized again, "Due to the nature of platforms, if monopolies become entrenched, winner-takes-all phenomena strongly emerge, making competition recovery very difficult," and stressed, "Regulation through platform legislation is necessary."
However, he added, "I believe issues such as commission fees between platforms and tenant businesses are difficult to resolve through legislation," and stated, "We will continue to pursue regulation through voluntary self-regulation in this regard."
The Platform Act aims to regulate unfair practices such as self-preferencing by a few monopolistic platforms, tying sales, and restrictions on multi-homing, and to create a competitive environment that allows free market entry.
The FTC also intends to respond strictly to abuse of monopoly power and unfair practices on platforms closely related to citizens' daily lives. The FTC aims to complete its investigation next month into YouTube, which became the number one music streaming service in Korea last year by 'tying sales'?offering the music service 'YouTube Music' free to paid subscribers. The review of Coupang, accused of manipulating algorithms to promote private brand (PB) products to the top of search rankings, is planned to be completed in the first half of this year.
Additionally, the FTC will proactively identify and conduct in-depth analysis of competition and consumer issues in the rapidly monopolizing artificial intelligence (AI) and e-commerce markets, publishing a policy report within the year.
The FTC launched an investigation in March into online video service (OTT) and music service providers for obstructing consumers’ rights to cancel subscriptions early, marking the first case for the newly established priority investigation team. In May, the investigation will expand to online shopping mall operators regarding obstruction and restriction of consumers’ rights to early cancellation of paid membership services. If violations are confirmed, the FTC plans to promptly initiate review procedures.
Reflecting the changed economic environment, the FTC will also finalize changes to the criteria for designating large business groups within this year. Although the economy continues to grow, the designation criteria remain rigidly set at 'total assets of 5 trillion KRW or more.' The FTC is considering changing the disclosure-target business group designation criteria from the current total assets of 5 trillion KRW or more to a GDP-linked method, though the exact percentage of GDP to be used has not yet been decided.
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