Fair Trade Commission Reviews Unfair Practices in the 4 Trillion Won 'Cloud' Industry Market

[Asia Economy Sejong=Reporter Dongwoo Lee] The Fair Trade Commission announced that starting from the 24th, it will conduct a fact-finding survey targeting major cloud service providers and service users. The goal is to identify factors restricting fair competition and foster a healthy cloud market.

Cloud services refer to users receiving IT resources such as servers, storage, and software through a network from external specialized companies as needed, instead of owning and managing them directly. Since the COVID-19 pandemic, with the expansion of remote work and the increased need for efficient data management, the market has grown at an average annual rate of about 16%, reaching a scale of 4 trillion KRW (as of 2020).

The Fair Trade Commission judged that the cloud industry has a high market concentration among a few companies, resulting in low competitive pressure and market transparency, and plans to inspect transaction practices and competition-restricting factors.

The survey will be conducted in two stages: first, distributing a 'fact-finding questionnaire' to cloud providers (Stage 1), and second, conducting a survey targeting stakeholders (Stage 2). The top 32 providers by revenue in each cloud service category will be subject to the Stage 1 survey. Stage 2 will target cloud service users, sales partners, and cloud software companies.

The Fair Trade Commission will analyze the main service contents and revenue scale of cloud companies, the transaction structure between cloud providers and customers or sales partners, pricing competition methods, and check for any unfair practices such as abuse of dual roles as both referee and player that distort competition.

To analyze the competitive status of the cloud market and derive improvement tasks, the Commission will request submission of necessary materials within the required scope and provide sufficient time for the survey subjects to prepare the documents.

The Fair Trade Commission stated, "Based on the results of the fact-finding survey, we plan to devise various measures to create a market environment that promotes innovative competition in the cloud market."

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