[2021 National Audit] Ruling and Opposition Parties Say "Platform Monopoly Is Serious"... Im Hye-sook Says "Positive Aspects Should Not Be Overlooked"

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[Asia Economy Reporter Eunmo Koo] At the National Assembly audit of the Ministry of Science and ICT, voices calling for regulation of domestic platform companies such as Naver and Kakao, which have recently sparked monopoly controversies, were raised across party lines. However, the Ministry of Science and ICT took a cautious stance, emphasizing that the positive aspects should not be overlooked.

Park Sung-joong: “Giant Platforms’ Abuse of Power Deals a Heavy Blow to Small Business Owners”

At the Ministry of Science and ICT audit held by the National Assembly’s Science, Technology, Information and Broadcasting Committee on the 1st, Park Sung-joong, the senior member of the People Power Party, pointed out that as the non-face-to-face society accelerated due to COVID-19, the influence of online platforms has grown, causing various problems.

Park said, "Monopolistic companies dominating the market such as Naver, Kakao, Coupang, Baedal Minjok, and Yanolja are trapping small business owners in a cage and driving nails into them," criticizing Minister Lim Hye-sook’s remark at the 'Digital Platform Companies Meeting' on the 29th of last month that "platforms should not be viewed solely as objects of regulation" as complacent.

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He said, "Minister Lim is too unaware of reality," and pointed out, "In the case of Naver and Kakao, they opposed Google’s forced in-app payment citing excessive fees, but looking at the facts, they are more brutally abusing consumers and small businesses than Google."

Park also pointed out that domestic giant platform companies are engaging in 'abuse of power' by imposing excessive fees and forcing advertising purchases on tenant companies as they expand into content businesses such as webtoons and web novels, as well as e-commerce. He said, "Naver and Kakao charge webtoon creators fees ranging from 30% to 45%," adding, "They also impose over 20% fees on hair salons and commerce sales commissions, which is not coexistence but destruction."

He also criticized the insufficient contribution of platform companies like Naver and Kakao to society. Park questioned whether the companies have many employees, have ever provided coexistence funds, or engaged in volunteer work, saying, "It is frustrating that the minister makes such complacent remarks while small business owners are suffering day by day due to COVID-19."

Woo Sang-ho: “Giant Platforms Repeating Past Chaebol Practices”

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Ruling party lawmaker Woo Sang-ho also criticized that Naver and Kakao, which started as venture companies, have repeated the practices of past chaebols after becoming giant platforms, warning that if Korea’s IT industry is monopolized by a few giant platforms, innovation will stagnate and the industrial ecosystem will collapse, reproducing the economic structure dominated by chaebols in IT as well.

Woo pointed out, "Recently, they have become targets of social criticism due to sprawling management like chaebols, and as industrial capital, they avoid existing financial regulations through loopholes and preferential legislation." He also said, "There are criticisms about infringement on small businesses and abuse of power," adding, "The closed organizational culture where a few monopolize decisions is also a problem."

He then said, "The Ministry of Science and ICT should now forget about Naver and Kakao," emphasizing, "The monopoly structure must be dismantled and competition systems strengthened so that new innovative venture companies can emerge and grow."

Lim Hye-sook: “Well Aware of Side Effects... Positive Aspects Must Also Be Considered”

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Regarding the criticism of platforms by lawmakers from both ruling and opposition parties that day, Minister Lim Hye-sook of the Ministry of Science and ICT responded, "We are well aware of the side effects caused by the expansion of platform influence, but we must also consider the positive aspects of platforms such as their social contributions in ultra-large AI investments and COVID-19 response in a non-face-to-face society," adding, "We will hold policy forums to keep pace with social demands."

Minister Lim said, "Regarding platform regulation, global competition must be taken into account," adding, "If regulations are applied to our companies but not to foreign companies due to international trade negotiations, it will only weaken the competitiveness of domestic companies, so a cautious approach is necessary."

She also said, "An aspect that should not be overlooked is the contribution of platforms in a non-face-to-face society," noting, "There is social contribution in ultra-large AI investments, new technology investments, and COVID-19 response." She continued, "Kakao recently proposed coexistence cooperation measures," and said, "We will continue policy forums to facilitate communication with platform companies regarding these social demand measures going forward."

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