[2021 National Audit] Platform National Audit... Science and ICT Committee Also Simultaneously Criticizes 'Monopoly' (Comprehensive)

On the 1st, Cho Seung-rae, a member of the Democratic Party of Korea, attended the National Assembly's Science, Technology, Information and Broadcasting Committee's audit of the Ministry of Science and ICT held at the National Assembly, protesting against the placards held by members of the People Power Party demanding a special prosecutor investigation related to the Daejang-dong scandal. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Eunmo Koo] At the National Assembly’s Science, Technology, Information and Broadcasting and Communications Committee’s audit held on the 1st, voices calling for regulation of domestic platform companies such as Naver and Kakao, recently embroiled in monopoly controversies, were raised across party lines. However, the Ministry of Science and ICT took a cautious stance, stating that the positive aspects should not be overlooked.

◆Criticism of "Giant Platform Abuse of Power" Pours In

Park Sung-joong, the floor leader of the People Power Party, pointed out that the influence of online platforms has grown as the non-face-to-face society accelerated due to COVID-19, and various problems have arisen.

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

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

Park also criticized domestic giant platform companies for engaging in ‘gapjil’ (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 authors fees of 30-45%," and "They also impose more than 20% fees on hair salons and commerce sales, which is not coexistence but destruction."

He also pointed out 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."

Ruling party lawmaker Woo Sang-ho also criticized that Naver and Kakao, which started as venture companies, have followed the methods of conglomerates 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 wither, reproducing the economic structure centered on conglomerates in IT as well.

Woo pointed out, "Recently, they have become targets of social criticism due to conglomerate-like sprawling management, and as industrial capital, they avoid existing financial sanctions through loopholes and preferential legislation." He also said, "There are criticisms of infringement on small business districts and abuse of power," and "The fact that a few monopolize decisions due to a closed organizational culture is also a problem."

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

◆Minister of Science and ICT: "Positive Aspects Must Also Be Considered"

There were also calls for the government to actively introduce structural measures to prevent platform monopolies. Democratic Party lawmaker Han Jun-ho demanded that the government introduce countermeasures at the national level to prevent monopolies of online platform companies.

He explained, "As the power of platforms grows, the sprawling expansion of platform companies is affecting small business owners and the public," adding, "The U.S. House of Representatives has even suggested the possibility of corporate breakups for platform companies, and the Platform Monopoly Termination Act has been proposed." He urged, "The Ministry of Science and ICT must introduce structural measures to prevent damage in the platform monopoly market." Also,

Regarding the criticism of platforms by lawmakers from both parties that day, Minister Lim Hye-sook of the Ministry of Science and ICT responded, "We are well aware of the side effects of the expansion of platform influence, but we must also consider the positive aspects of platforms such as their social contributions in the ultra-large AI investment and COVID-19 response in the non-face-to-face society."

She explained that while there are negative aspects of platforms, the positive parts should not be overlooked. Minister Lim said, "Regarding platform regulation, global competition must be considered," adding, "If regulations are applied to our companies but not to foreign companies due to international trade negotiations, it will only lower 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 the non-face-to-face society," adding, "There is social contribution in ultra-large AI investment, new technology investment, and COVID-19 response. Kakao recently presented a coexistence cooperation plan." She also indicated that structural measures are a last resort and that their introduction should be carefully reviewed.

◆"Lee Hae-jin, Come Out" "Is There Something Fishy?" Heated Debate Over Witness Adoption

On that day, the Science and ICT Committee briefly engaged in a heated debate over whether to adopt Lee Hae-jin, Naver’s GIO (Global Investment Officer), as a witness. When Park Sung-joong, the floor leader of the People Power Party, raised suspicions of protection by lawmaker Yoon Young-chan, a former Naver executive, Yoon strongly demanded an apology.

Park said, "I express strong regret over the Democratic Party’s protection of Naver and Kakao during the audit witness negotiations," and criticized, "They have been delaying the adoption of witnesses Lee Hae-jin and Kim Beom-su until now." He added, "Last year, the Democratic Party blocked the adoption of Lee Hae-jin as a witness until the end, and they are blocking it again this year," asking, "Is there something fishy related to the Democratic Party like Governor Lee Jae-myung’s Daejang-dong suspicion? If there is a will to stop the abuse of platform companies, I urge the adoption of Naver and Kakao witnesses."

Yoon Young-chan, a former Naver executive, immediately pushed back. Yoon said, "I strongly regret the personal attack against me due to remarks that could identify a fellow lawmaker," demanding, "Park Sung-joong must apologize. It is the minimum courtesy to speak with accurate evidence."

After Yoon’s remarks, as the verbal dispute between lawmakers from both parties continued, Lee Won-wook, the chair of the Science and ICT Committee, intervened. Lee said, "It would be desirable to make cautious remarks about fellow lawmakers."

At one point in the morning, all seven standing committees were suspended as the ruling and opposition parties clashed over the special investigation into the Daejang-dong development preferential treatment suspicion in Seongnam City. When People Power Party lawmakers simultaneously placed signs on the audit desks with phrases such as "Those who refuse the special investigation are the culprits" and "Accept the special investigation into Lee Jae-myung’s Pangyo Daejang-dong gate," Democratic Party lawmakers refused to start the audit, causing a recess commotion.

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