Kakao Targeted by Fair Trade Commission... 'Free Pass' for M&A Applications Over the Past 5 Years

76 Mergers and Acquisitions Reviews of Kakao and Naver Affiliates Passed 100% in the Last 5 Years

[Sejong=Asia Economy Reporter Kwon Haeyoung] It has been revealed that the Fair Trade Commission (FTC) has not blocked any mergers and acquisitions (M&A) cases involving Kakao and Naver over the past five years. Amidst the government and political circles intensifying regulations on online platforms across the board, claims have been raised that there are loopholes in the FTC’s corporate review system.

On the 14th, Rep. Yoon Gwansuk of the Democratic Party analyzed data titled 'Corporate Merger Review Results of Kakao and Naver Affiliates in the Last Five Years,' submitted by the FTC. From 2017 to the first half of this year, there were a total of 76 corporate merger reviews?44 for Kakao and 32 for Naver?and all were approved regardless of whether they were horizontal, vertical, or mixed types of mergers.

Among the 76 corporate merger reviews during this period, all but 10 were conducted through a simplified review process on a fast track. Notably, there were three merger reviews related to K Cube Holdings, where Kakao Chairman Kim Beom-su’s children are employed and which is currently under FTC investigation, and all of these were also approved during the same period.

Rep. Yoon argued that the online platform corporate merger review process should be promptly improved to establish regulations that prevent platform companies from expanding their business indiscriminately.

Rep. Yoon stated, "Under the current review criteria, most platform companies’ mergers fall within a safe zone, preventing in-depth reviews," and added, "there is an urgent need to prepare supplementary measures for the corporate merger review criteria that can effectively regulate the phenomenon of giant platform companies strengthening their dominance through mergers and acquisitions (M&A)." He further emphasized, "To reform the review system for platform corporate mergers, efforts should focus on budget reinforcement, manpower supplementation, and selection of research projects, accelerating preparations for improvement measures."

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