Fair Trade Commission Summons Big Tech Again... Announces Intensive Monitoring

[Asia Economy Reporter Eunju Lee] The Fair Trade Commission (FTC) will strengthen its oversight of big tech companies that abuse their monopoly power. It will also put a brake on the characteristic sprawling mergers and acquisitions (M&A) of big tech firms. Intensive inspections will be conducted on big tech companies that obstruct the entry of other businesses or engage in unfair practices against tenant companies. The FTC is also pushing for the preparation of a ‘customized legislative bill’ to curb the abuse of monopoly power unique to big tech. The FTC has announced thorough monitoring of domestic and international big tech companies throughout this year.

On the 26th, the Fair Trade Commission reported its major business plan for 2023, which includes these measures, to President Yoon Suk-yeol. This concretizes the FTC Chairman Han Ki-jung’s ongoing commitment to ‘checking big tech platforms’ since his inauguration.

Semiconductors, app markets, mobility, and open markets have been designated as key focus areas for the FTC’s intensive monitoring this year. The plan is to block acts that prevent competing businesses from entering these markets or interfere with their business activities, as well as to stop unfair practices that favor their own products to unjustly transfer dominance. For example, the FTC will closely monitor app market companies that obstruct app developers from launching competing app markets. In particular, unfair trade practices that destroy a fair trading environment on content platforms like Kakao Entertainment will be under close scrutiny. The FTC will actively monitor unfair practices such as forcing the provision of secondary work rights (dramas, games, etc.) in the web novel sector and blocking new entrants in the music copyright market.

Reviews of mergers and acquisitions (M&A) by big tech companies will be strengthened. To prevent M&A that hinder market innovation, thorough examinations will be conducted on big tech firms with significant concerns over expanding dominance. Additionally, after conducting an investigation into the characteristic ‘sprawling M&A’ strategy of big tech that blocks market competition through startup acquisitions, the FTC will revise M&A reporting standards. Furthermore, the FTC plans to form a task force of internal and external experts to consider whether to prepare additional legislative bills to ‘customize’ checks on the abuse of monopoly power by big tech.

Intensive inspections will also be carried out on consumer deception occurring within online platforms. This includes checking for manipulation of product search rankings through traffic abusing (keyword-focused searches) and manipulation of ‘probability-type items’ by game companies. Inspections will also cover covert advertisements and manipulated user reviews, mainly involving small tenant companies. For secondhand trading and resale platforms, where fraud cases have recently increased, the FTC plans to actively enforce the Electronic Commerce Act against sellers. In addition, amendments to the Electronic Commerce Act and the Enforcement Decree of the Framework Act on Consumers will be made to minimize the spread of consumer damage in advance. Unfair contract terms on platforms such as mobility, live commerce, and subscription services will also be intensively inspected.

To strengthen a fair trading foundation for small and medium-sized enterprises and small business owners, the FTC will establish a legal basis for the ‘supply price linkage system’ through amendments to the Subcontracting Act and clearly present detailed standards through enforcement decrees. Intensive inspections will also be conducted on unfair practices occurring in content sectors such as dramas and movies, and software sectors including cloud and games. There are plans to focus inspections on forced purchases imposed on franchisees, mainly in the food service industry. Additionally, the FTC plans to improve case handling standards and procedures by clearly stating the suspected legal violations, investigation period, and scope in investigation notices during on-site inspections. Vice Chairman Yoon Su-hyun stated, “The law enforcement system improvement plan has been underway for a year and is not directly related to the recent Cargo Solidarity investigation.”

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