Lim, Do Yeub
Sep 14th, 2021
The Korean government and financial department recently have started to regulate several big tech firms in Korea. The firms include Kakao and Naver, which are the two leading firms in the IT industry. The government pointed out that they are overusing their power in the market. Kakao and Naver are both IT platform-based firms. Kakao started with a free mobile chatting service and has expanded its business including transportation, finance, delivery, music, games, etc. Naver started with internet portal service and has expanded business fields toward internet shopping, AI, cloud service, media contents, etc. The government claims they are trying to maximize profits by exploiting the profits of the consumers based on their excessive market power.
The government is planning to enact a law regarding a regulation of the platform service of big tech firms as soon as possible. For the legislation, it is also planning to have a parliamentary inspection of the administration towards some of the IT platform firms. In addition, FSC(Financial Services Commission) has pointed out that Kakao and Naver have violated a law regarding the protection of the consumers of financial products. Through their apps, Kakao and Naver are offering a registration service of financial products such as an insurance or a fund. Consumers can compare and buy many different products by simply using the apps. However, FSC has stated that they need to be permitted by FSC in order to bridge sales of financial products. FSC has warned them to solve the problem before 25th of September or they will be punished according to the existing law.
The regulation of big tech firms has been an important issue around the world recently. According to the features of the platform industry and a network effect, it is easy to take an advantage and expand the business once a firm obtains a meaningful market share. The regulation towards the big tech firms is being held because there is a concern about their misuse of the power for excessively exploiting profits of the consumers. There are various views on this issue. Some say it is necessary to regulate the firms. On the other hand, some say too much regulation will disturb the development of the firms, and this will affect our society negatively.
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