Fair Trade Commission Chair: "Platform Driving Innovation Faces Growing Concerns Over Market Competition"

KFTC, Korean Economic Association, and Korean Industrial Organization Society Joint Academic Conference
Discussion on 'The Role and Direction of Economic Analysis in the Enforcement of Fair Trade Act in the Platform Sector'

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 5th, "As the influence of giant platform companies expands, concerns are growing that data monopolization, self-preferencing, and algorithm manipulation are hindering market competition."

On this day, Vice Chairman Kim made these remarks in a congratulatory speech at an academic conference jointly held by the KFTC, the Korean Economic Association, and the Korean Industrial Organization Society on the theme of 'The Role and Direction of Economic Analysis in the Platform Sector.'

Vice Chairman Kim pointed out that while platform companies lead market innovation, they also restrict competition. He said, "Kakao Taxi's dispatch logic brought innovation by shortening call times, but it has been criticized for discriminating against non-affiliated taxis," and added, "Coupang led logistics innovation through Rocket Delivery but was sanctioned by the KFTC for abusing its trading position over suppliers."

Vice Chairman Kim emphasized that the unique competitive environment of the platform ecosystem requires new methodologies for enforcing competition law. He stated, "Most competition law issues raised in the platform sector, such as data monopolization based on network effects and collusion using algorithms, are difficult to judge illegality through a one-sided approach and are challenging problems that must be resolved through precise economic analysis," adding, "We are continuously developing economic analysis techniques in line with the changing market environment, as exemplified by the application of the innovation market approach in the Google operating system (OS) dominant market abuse case."

The symposium was divided into two sessions: ▲ Current status of competition policy and economic analysis in the platform sector ▲ Latest cases of economic analysis in the platform sector.

In the first session, Professor Park Min-su of Sungkyunkwan University presented on "An Economic Review of Platform Regulatory Issues," introducing regulatory issues related to online platforms and discussing the economic implications of ex-ante and ex-post regulations on platforms. Following this, Dr. Yang Yong-hyun of the Korea Development Institute (KDI) introduced various market delineation methods considering the platform characteristic of two-sided markets, suggesting that competition authorities should delineate markets using traditional single-sided market delineation methods, and if the respondent disagrees, they must prove the need for different delineation considering indirect network externalities.

In the second session, Dr. Lee Gong of KDI presented on "Polarization of the Dining Industry Market and the Role of Platforms," examining key issues arising from the rapid growth of the delivery app market and discussing the impact of delivery app services on the growth and distribution of the dining industry market.

The KFTC plans to review and incorporate the various expert opinions raised at this symposium in future economic analyses conducted in fair trade cases in the platform sector.

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