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“Do not provide confirmed listings to competitor portals” illegal
The FTC imposed a 1 billion won penalty on Naver
Naver can only be used for confirmed property classification
Naver was fined by the Fair Trade Commission for preventing the provision of real estate sales information to rival Daum and real estate information providers.
On the 5th, the Fair Trade Commission imposed a correction order and a fine of 1,032 million won, saying, “Naver has prevented the supply of real estate information to competitors.” This is to avoid supplying real estate sales information, which Naver determined as ‘confirmed sales’ through its own system, to the next competition portal.
Confirmed ownership is a classification and system introduced by Naver to reduce the burden on users due to the increase in false ownership as it was confirmed if it actually exists through a brokerage company. However, competitors who have been provided the corresponding sale information will not be required to attach the Naver assigned ‘sale confirmed’ label or a corresponding identifying name to the information.
For example, let’s say Real Estate Information Company A has five properties that have been verified by Naver and five other properties. Whether company A provides 5 confirmed and 3 unconfirmed properties to another real estate brokerage platform B, or only 5 verified properties, Naver should not prevent company A from acting. However, if Company B provides services by attaching separate tag labels to the five confirmed items during the service process, it violates Naver’s intellectual property rights.
“Naver abuses competitiveness to dominate the real estate market”
The problem started when Naver blocked the sales information contracts between the Daum portal and real estate information companies twice in 2015 and 2017. The FTC’s judgment is that real estate information companies such as Real Estate 114 and Real Estate Serve have prevented the next provision of the information provided to the frontline brokers.
Naver notified that the next time these information companies provide information for sale, the Naver platform will suspend the related information services. In the contract renewal process, the phrase “Naver must not provide the property stated as ‘confirmed property’ to a third party” was inserted.
In particular, for Real Estate 114, it was requested not to provide not only the verified properties, but also the properties requested to be verified by Naver, to a third party for three months. It is an interpretation of the FTC that has practically blocked transactions due to the nature of the real estate market, where most transactions take place within three months of the sale. Real Estate 114 also asked Naver to remove the provisions because it was deemed unfair.
The FTC believes that although real estate information companies recognized the injustice of such a request, Naver was unable to reject it due to its market power. Naver accounts for more than 40% of the number of sales and more than 70% of unique visitors (UV) and page views (PV) among the websites on which sales information is published.
Consequently, Daum is being kicked out of the real estate sales business and is sending related information on the portal to other business operators. Although mobile operators such as coffee shops and Jikbang appeared, most of them were studio and office brokerages with low transaction prices.
The Fair Trade Commission said “Naver’s ban on providing third party information to real estate information providers is blocking latecomers from entering the market.” They are intentionally excluding competitors by abusing their dominance in the marketplace. The request for restrictions on the provision of third party information to real estate information companies was also considered an unfair transaction.
Naver, “The FTC Does Not Recognize Intellectual Property Rights”
Naver strongly objects to the fact that the FTC did not recognize the intellectual property rights of the confirmed property system, which was built with about 10 billion won. The policy is that even the demand is immortal.
Naver emphasized that establishing a confirmed property system is beneficial for real estate information companies. Since 2003, Naver has directly collected information on real estate sales and reviewed it on the portal. Naver, who was late at the time, developed and introduced a confirmed sales system in 2009, and reached the top of the market.
However, in 2013, it was decided to stop collecting property information and to receive property information only through real estate information companies. At that time, controversy arose over the infringement of the business district of large corporations.
Naver is charged a fee of 500 won per box for real estate information companies to register a property, and 1,000 won per box to obtain a confirmation property. Naver said: “Since the conversion of related services in 2013, it has never increased the rates,” and said: “The decision to bear the impact of reducing the commercial sales related to one fifth due to the conversion of the service.”
Naver is in a position where it is natural to prevent competitors from receiving only confirmed information about properties from real estate information companies. This is because Naver’s system and know-how was used in the confirmed property classification process.
A Naver official said: “At the time, I asked a competitor to pay a fee to Naver to use only the confirmed sale, but it was rejected.” To do it.”
The listing information is for the information company, only the confirmed listing tag is Naver
The FTC’s decision is significant in that it gave content providers more autonomy from content providers, such as real estate information companies and Naver, a platform. Naver should not impose restrictions on providing information collected by real estate information companies to other platform operators.
The FTC determined that Naver’s competitive advantage would be maintained even if other platform operators were only provided with confirmed listing information, if they were unable to separately label or categorize the “verified listing.” An FTC official said: “If users cannot recognize it as confirmed property on other platforms, Naver’s competitive advantage will be maintained.”
However, Naver admitted Naver’s argument about the scope of the real estate information market, which is one of the reasons for Naver’s abuse of market power. Not only platforms like Naver, Daum, and Jikbang, but also real estate information companies like Real Estate 114 are classified in a single market.
Initially, the FTC investigators excluded real estate information companies and defined only platforms such as Naver and Daum as an “online real estate information comparison marketplace.” However, since the difference between real estate information companies and content providers is not great, it was considered a competent company in one market.
If there is an online news market, it means there is no separate portal news market like Naver and Kakao, but it should include all website and media apps like Hankyung.com and Digital Chosun. However, even if the market was regulated in this way, it did not affect sanctions against the Fair Trade Commission, such as fines, because Naver’s market share was overwhelming.
There is also criticism in the IT industry that the purpose of taming Naver is for the FTC’s trial to be late. One official noted that “amid the frustration of entering Daum-related markets, it is not a market for new business to emerge,” noting that it is an extension of the domestication platform companies that are increasing in intensity this year. .
The FTC is also investigating Naver’s online shopping center and video business. These surveys are also expected to be released during the year.
Reporter Noh Gyeong-mok / Gu Min-ki [email protected]
