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South Korea's FTC Slaps Naver with $23M Fine for Distorting Search Results.

Source: Naver

South Korea's Fair Trade Commission (FTC) has fined Naver, the country's leading search engine, KRW 26.7 billion (USD 23 million) for antitrust violations related to manipulating its search algorithm.

The FTC alleged that Naver deceived customers by displaying biased search results to favor its e-commerce and live-streaming businesses.

This case marks the first time a dual-role platform has been fined for such violations in South Korea.

Between February 2012 and September 2013, Naver allegedly applied internal weighting factors to competitors and third-party open market platforms to lower their search result rankings compared to its services.

In addition, the e-commerce team promised increased exposure to third-party sellers if they linked to Naver Pay, the company's payment service.

As a result, Naver's market share in the open market business rose from 4.97 percent in 2015 to 21.08 percent in 2018, securing third place.

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Meanwhile, four out of five open market platform service providers lost 18% and 30% of their market share.

In response to the allegations, Naver argues that it has regularly updated its service to maintain diversity, with 50 updates between 2010 and 2017.

In addition, the company claims that the FTC is exaggerating by focusing on only five cases and that only 14.8% of transactions were made through Naver Shopping. Naver plans to challenge the FTC's decision in court.