[THE VIEW]The "Catfish Effect" of Google Maps Entering Korea

End of Protection for Naver and Kakao
Strengthening the Industry Through Unlimited Competition

Amid mounting pressure from the US government for market liberalization, South Korea has authorized the overseas export of Google's high-precision maps, a move it had long declined to approve. As a result, not only Google Maps but also global companies such as Apple, which operate location-based services, will be able to significantly expand their service offerings in South Korea. Naver and Kakao, which have effectively maintained monopolistic positions in the domestic map and location-based services industry, now face genuine competition. The time has come for these companies to prove their industry leadership through innovation under competition, rather than relying on the stability of protectionism.

Until now, tourists visiting South Korea-undeniably one of Asia’s top tourist destinations-have often been surprised by the inability to fully utilize Google Maps in the country. Restrictions extended not only to navigation but also to the use of public transportation such as buses and subways, as well as information searches. While domestic users accustomed to local applications may have felt less inconvenience, this is only a short-term perception. In the long run, it is important to recognize that such a system does not benefit domestic consumers either. The market changes brought by Google Maps should be understood as a shift toward a competitive landscape. A structure in which only specific domestic platforms like Naver and Kakao are available limits consumer choice and reduces pressure for innovation. Without competition, there is no innovation. In a market where direct comparison and competition with global players such as Google Maps are blocked, the pace of service quality improvement slows, and cost structures are likely to remain inefficient. Ultimately, these costs are borne by consumers.

A prime example of this issue is pricing and service fees. Map-based services are not limited to simple navigation; they serve as essential infrastructure for various industries, including delivery, transportation, accommodation, and commercial area analysis. For instance, in an industry lacking competition, if certain monopolistic providers set high fees for the use of location data and no viable alternatives exist, startups and small businesses have little choice but to accept these costs. This leads to higher service prices, with the final burden falling on consumers. In contrast, the presence of global competitors increases the likelihood that prices and conditions will be set more reasonably as companies strive for competitive advantage. The same applies to the pace of innovation. In a monopolistic structure, there is less incentive for rapid or proactive improvement of services and features.

Conversely, the emergence of strong competitors accelerates efforts toward service enhancement, user experience improvements, and advancements in data utilization technology. Companies must continually evolve to gain an edge in the competition for survival. Competition is not merely about dividing market share; it is a driving force that elevates the overall technological level of an industry. Furthermore, an open market is expected to put positive pressure on domestic companies to strengthen their global competitiveness. In a non-competitive environment, strategies tend to become inward-focused. However, in an open competitive landscape, domestic companies have no choice but to compete with international firms on equal terms, thereby raising their technological capabilities and service quality to a world-class standard. While a closed environment may offer short-term industry protection, in the long term, it paradoxically restricts the global expansion and overseas advancement of domestic firms.

The location and map service industry, long dominated by Naver and Kakao, can no longer be regarded as a strategic sector in need of protection. While some level of protection may have been necessary in the early stages of industry development, technology has now become largely standardized, and it is time for domestic firms to compete shoulder-to-shoulder with global players. The focus should now shift from protection to fostering new competitiveness through openness. This market liberalization should not be seen as a crisis for specific domestic companies, but rather as an opportunity to strengthen the overall industrial structure.

Professor Kyungna Kyung, Department of Computer Science, National University of Singapore

This content was produced with the assistance of AI translation services.