Online platform monopoly threatens national security

Oct 19, 2022, 09:11 am

The service disruption of Kakao and Naver due to fire at data center over the weekend is an incident that clearly shows how big that risk poses to our society.

President Yoon Suk-yeol emphasized the need for regulations of the Fair Trade Commission (FTC) on online platforms that have the state-level infrastructure.

“In a hyper-connected society, data telecommunication infrastructure is directly related to national security and citizens’ lives,” presidential spokesperson Kim Eun-hye quoted Yoon as saying at the presidential office on Sunday. “Disruption to a key network infrastructure service not only causes significant inconvenience to the public but also a fatal blow to national security.”

◇ President stresses the need for regulations on giant online platforms

The remarks indicate the Yoon government is planning to revise the monopoly and security risks of online platforms including Naver. In fact, there is a strong public opinion that the monopoly of giant platform providers should be resolved.

The problems raised by ASIATODAY earlier this month when it started the national movement to ‘Make Naver Right’ to resolve monopolization of Naver are now drawing attention as a national concern.

Data from Kakao, Naver and SK affiliates such as SK Telecom and SK Broadband were stored in the Pangyo Data Center, where the fire broke out. The important thing is that the country or society suffered tremendously due to the carelessness of private operators. In order to prevent this, the ‘Act on Monopoly Regulation and Fair Trade’ is about to be pushed to prevent a private business operator from monopolizing a specific field, which inflicts considerable damage on the nation and the people.

Under the bill, the FTC can intervene and correct private companies that abuse their dominant position in the market. It guarantees freedom of economic activity as much as possible, but clearly indicates that correcting monopolistic behavior is the responsibility of the state.

In the network era, the platform business model has a characteristic that results in winner-take-all, as there is a saying, “whoever controls the platform rules the world.”

In particular, Naver secured a huge number of subscribers through the function of a media portal, becoming South Korea’s largest platform operator that dominates all industries in the country.

◇ Private companies Naver and Kakao enjoy administrative power

Naver founder Lee Hae-jin and Kakao Center head Kim Beom-soo are emerging powers with great influence in Korea. Naver and Kakao are taking the place of administrative power beyond the realm of business.

Amid the pandemic, Koreans experienced a situation where QR codes granted through Naver and Kakao took the place of their identity. Although it was said to be for the convenience of the public, it was as if the government had granted the status of public power to them. Furthermore, even most administrative authorities are conducting administrative work through these platforms.

Not only medical insurance and pension information, but also notification of enlistment are provided via private platforms. People who do not use Naver or Kakao are now unable to understand the contents of the official government announcements. We have to think whether we will continue to watch the situation where private companies play the role of the state.

The government and politicians are expected to take this incident as an opportunity to begin discussions to resolve the monopoly and monopolistic structure of the platforms. For now, the FTC-level monitoring and investigation is expected to be strengthened significantly. A bill to prohibit platform companies from abusing their position as monopolistic operators is likely to be legislated.

◇ The biggest concern is Naver’s ratings of Korean media companies

Among the harms of platform monopoly, the biggest concern is platform operator’s monopolization of public opinions through the media portal function. In this regard, Democratic Party lawmaker Kim Jong-min criticized Naver and other portals providing the same news at the same time as issuing Rodong Sinmun, the sole official daily newspaper in North Korea.

Naver, which occupies nearly 60 percent of the search market, has the power to decide which media companies to work with or kick by grading them. The fact that a private company, not a national institution, has the authority to evaluate and determine the existence of a media company is a peculiar system that is unprecedented in the world.

◇ Naver founder Lee Hae-jin should make a decision for national development, public happiness and freedom of the press

The time has come for portal giant Naver to give up its power to evaluate news. In order to resolve Naver’s monopoly, the government and lawmakers should prepare related legislation so that Naver and other giant portals to adopt an out-link method that links news search results to media company’s website.

It is time for Naver founder Lee Hae-jin to make a decision for national development, public happiness, and freedom and development of the press.

#Naver #Kakao #monopoly