[2020 National Audit] Lee Yoon-sook, Naver Shopping CEO, "No Manipulation in Shopping Search"

"Equal Ranking Algorithm Used Across Multiple Off-Marketplaces and Shopping Malls"

Lee Yoon-sook, President of Naver Shopping, appeared as a witness at the National Assembly's hearing on the Fair Trade Commission and others held by the Political Affairs Committee on the 8th, drinking water as if feeling anxious. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Jin-gyu Lee] Yoon-sook Lee, CEO of Naver Shopping, reiterated on the 8th at the National Assembly’s Political Affairs Committee audit that "there was no manipulation of shopping search rankings." Opposition lawmakers belonging to the Political Affairs Committee raised their voices, demanding that Lee Hae-jin, Naver’s Global Investment Officer (GIO), be summoned to the audit to investigate allegations of portal algorithm manipulation.

Lee appeared as a witness at the Political Affairs Committee’s audit of the Fair Trade Commission (FTC) on the same day and stated, "Contrary to the FTC’s judgment, there was no manipulation of shopping search rankings, so I cannot agree with the manipulation claims."

She explained, "As a platform operator, we started the Smart Store business with the intention of providing a good platform for small business owners," adding, "We use the same ranking algorithm equally across Smart Store, various open markets, and other shopping malls."

She also said, "Efforts to improve shopping search quality and to produce diverse shopping search results may have appeared as manipulation," and added, "Since no illegal acts were committed, the FTC’s imposition of fines is unfair." She further stated, "Naver has never given preferential treatment to its own products or services, and if necessary, we are considering legal action."

The FTC imposed a fine of 26.7 billion KRW on Naver Shopping on the 6th, accusing it of changing the search algorithm to favor its own products without notifying competitors. This is the first case of sanction for preferential treatment through search algorithm manipulation. The FTC judged that Naver artificially altered the shopping search algorithm to place its own products or content at the top while pushing competitors’ results to the bottom.

On the other hand, Naver responded to the FTC’s judgment by stating, "The revision of the shopping search logic was an effort to provide optimal search results tailored to users’ diverse search needs and has nothing to do with excluding other companies." In a statement released on the 6th, Naver said, "In the current online commerce market where domestic and international companies fiercely compete, Naver Shopping competes with Danawa and Enuri, not with open markets. We regret the FTC’s recognition of Naver’s market dominance," and added, "We plan to challenge the unfairness of the FTC’s decision in court."

Regarding the relatively lower search weighting given to competing open market products, Naver rebutted, saying, "Weighting was applied to all shopping malls that provide sales performance information," and accused the FTC of maliciously claiming that Naver only applied weighting to its own open market products’ sales index to increase product exposure.

Meanwhile, following the Science, Technology, Information and Broadcasting Committee, opposition lawmakers also urged at the Political Affairs Committee audit on the same day that GIO Lee be summoned as a witness. Seong Il-jong, the senior member of the People Power Party, argued, "GIO Lee should appear at the audit to clearly explain the shopping algorithm manipulation directly to the public." He added, "Since the U.S. House subcommittee investigated Facebook and Amazon and uncovered 1.3 million issues, the Political Affairs Committee should also summon Naver’s head to get a firm response on future measures."

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