Kim Jae-shin, Vice Chairman of the Fair Trade Commission, "Will Strictly Respond to Distortion of Search Algorithms"

'Fairness and Transparency of Search Algorithms and Competition Issues' Academic Forum

Kim Jae-shin, Vice Chairman of the Fair Trade Commission. (File photo) [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Joo Sang-don] Kim Jae-shin, Vice Chairman of the Korea Fair Trade Commission (KFTC), stated on the 10th, "We will respond strictly to acts by key online platform operators who act as both referee and player, artificially adjusting or distorting rules to favor their own products and services."

On this day, Vice Chairman Kim made these remarks in a congratulatory speech at an academic forum jointly hosted by the KFTC and the Korean Industrial Organization Society on the theme of "Fairness and Transparency of Search Algorithms and Competition Issues." The forum, held at the Korea Chamber of Commerce and Industry, was conducted without an audience in accordance with COVID-19 prevention guidelines.

Vice Chairman Kim emphasized, "In the digital economy centered on online platforms, the exposure ranking determined by search algorithms can be the criterion that separates market winners and losers," adding, "It cannot be ruled out that online platform operators might adjust search algorithms in ways favorable to themselves to become winners."

In addition to investigating and correcting individual operators, Vice Chairman Kim also suggested that increasing transparency in transaction rules within the platform sector could be an effective solution to prevent legal violations. He explained, "Major countries such as the European Union (EU) and Japan have completed legislation to enhance the fairness and transparency of search exposure rankings and are already implementing it. Since the National Assembly is currently discussing the Platform Fairness Act, if legislative outcomes are achieved in the future, minimum necessary transparency guarantees will be established for exposure rankings that significantly affect the rights and obligations of tenant companies."

The first presenter at the forum, Professor Yoon Kyung-soo of Gachon University’s Department of Economics, discussed the topic "Search Non-neutrality: Incentives, Effects, and Regulation" from an economic perspective. Professor Yoon explained that due to the characteristics of two-sided markets, where platform operators provide search services to consumers and earn revenue from businesses, fundamental incentives for search bias may arise. He also pointed out that such search bias can cause exclusion effects such as market foreclosure and restrictions on new entrants, and may mislead consumers, resulting in reduced search quality, increased search costs, and decreased utility by hindering optimal choices.

Professor Choi Nan-seolheon of Yonsei University Law School continued the discussion from a legal perspective under the theme "Search Algorithms and Competition Policy." Professor Choi noted that algorithms may reflect developers’ intentions and data biases, leading to biased search results. In particular, she observed that major search service providers, by vertically integrating related business areas, may exhibit self-preferencing issues.

The KFTC plans to continue responding to key issues related to the digital economy by maintaining ongoing communication with experts and stakeholders, using this academic forum as a stepping stone.

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