Possible Violation of Fair Trade Act: "Abuse of Market Dominance"
Unauthorized AI Training, Source Distortion, and Unpaid Compensation... First Complaint Filed
The Korea Newspaper Association (President Lim Chaecheong) announced on April 24 that it had filed a complaint with the Korea Fair Trade Commission (KFTC) against Naver Corporation (hereinafter "Naver") for alleged violations of the Monopoly Regulation and Fair Trade Act (Fair Trade Act).
Korea Newspaper Association
In the complaint submitted, the association argued that Naver has continuously engaged in serious unfair practices by developing and operating artificial intelligence (AI) services using news content, which is a core asset of news organizations, without authorization.
The main illegal acts by Naver, as pointed out by the association, fall into three categories. First, Naver used news content for AI training without explicit consent from news organizations or proper compensation in the process of developing and operating its own large language models (LLMs), "HyperCLOVA" and "HyperCLOVA X." As competition in generative AI technology intensifies, news content produced by the media is increasingly recognized as a high-quality training resource due to its timeliness, accuracy, and diversity.
Second, Naver has not clearly disclosed which news articles from which news organizations, or to what extent, have been used for AI training. The association defined this as "an act of providing disadvantages under the Fair Trade Act, fundamentally blocking news organizations from exercising their legitimate rights."
Third, Naver has been providing answers to users by copying, summarizing, and reorganizing news content without authorization in its own generative AI-based search services, such as "Cue:" and "AI Briefing." The association pointed out that this reduces the need for users to visit news organizations' websites directly, leading to a decrease in web traffic and a loss of revenue opportunities. Additionally, it noted that there are frequent cases where the original context is distorted or important information is omitted, and sometimes sources are not clearly indicated or entirely unrelated articles are cited as sources.
The association determined that these actions by Naver constitute an abuse of its "market-dominant position" in the domestic search and online news distribution markets, as well as an abuse of its "superior bargaining position" arising from news partnership agreements. Accordingly, it filed a complaint with the KFTC for violations of Article 5 (Prohibition of Abuse of Market-Dominant Position) and Article 45 (Prohibition of Unfair Trade Practices) of the Fair Trade Act.
Furthermore, the association expressed concern that "while platform companies gain enormous profits by unauthorized use of news content, the news organizations that produce the content are facing financial difficulties." It warned that "ultimately, this could lead to a decline in the production of high-quality news and cause serious harm to society as a whole."
Jihyang, the law firm representing the association, stated, "Globally, competition authorities are actively investigating and discussing legislation to establish fair relationships between AI developers and news organizations," and added, "Given these trends, an active role by our Fair Trade Commission is urgently needed."
Raising Issues to Protect Democracy and Media Diversity
The association emphasized that this complaint goes beyond a simple corporate dispute and could serve as an important turning point for establishing fair competition and securing media diversity.
The association stated, "Abuse of market dominance by platform companies can undermine the function of the media and harm the diversity of public opinion," adding, "This is an issue that shakes the very foundation of a healthy democratic society."
It went on to demand that Naver: ▲ cease unfair practices and implement corrective measures, ▲ transparently disclose AI training data, ▲ establish fair compensation standards, and ▲ build a mutually beneficial ecosystem between AI technology and the media.
Furthermore, the association clarified the social significance of this complaint by stating, "Protecting the rights of news producers and creators in the AI era, establishing fair trading practices, and preventing the harms of platform monopolies are essential to maintaining a healthy ecosystem for public opinion."
The association strongly urged, "We call on the Fair Trade Commission to recognize the gravity of this matter and to take strict action to restore market order and ensure the sound coexistence of the media and AI industries."
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