FTC Fine Korea’s NHN
By Staff
In Korea, the Fair Trade Commission (FTC) has fined Internet provider NHN over $216,000 for ‘illegal practices related to online advertising in several contracts with user-created content providers’.

NHN is the operator of the nation’s largest Internet portal, Naver, along with the Hangame.com online gaming site and earned 48.5 percent of its total sales from search and advertisement businesses in 2006.

“As NHN is the country’s dominant Internet portal company in terms of market share and search frequencies, the company should not compromise fair competition,” said a spokesperson from the FTC in a press briefing.

According to a piece in the Korea Times, the FTC also ordered Yahoo Korea to correct what it reported were unfair contracts with small online game providers and fined SK Communications just over $119,000 while follow providers Daum Communications and KT Hitel escaped any penalties.

”We penalised Internet portals for the first time, which is meaningful,” said the spokesperson.

“The decision will create an environment for fair competition.”

NHN stated that it would take the issue to court as the Government’s definition of the company as the industry’s dominant player did not reflect fair guidelines and could drag down its share price.

“It is nonsense to define our company as the dominant player just because of market share and the fact that we provide composite services such as news, e-mail and games,” said a spokesperson for NHN.

The FTC began its investigations into Internet portals a year ago at the request of the National Assembly amid rumours that market leaders were colluding in price fixing and other illegal practices relating mostly to online advertising.

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