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Unbridled Days Could Be Over for Portal Sites
New Regulations
Unbridled Days Could Be Over for Portal Sites
  • By matthew
  • April 29, 2014, 07:27
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The government is looking into methodologies to evaluate the status of market competition among large portal companies like it does to mainstay telecommunication companies.

A Ministry of Science, ICT, and Future Planning associate said on April 29 that, “Last year’s studies show that portal research markets can be categorized as an independent market. This year, we are planning to iron out specific methodologies such as how to categorize the market and how to define market dominant businesses.”

In this regards, the Ministry called for cooperation by summoning major portal companies such as Naver, Daum, and SK Communications in the afternoon of the same day.

The current Telecommunications Business Act requires an annual status evaluation on competition in mainstay telecommunication businesses (wire telephone, mobile communication, and high-speed Internet). Based on the result, a company with more than 50 percent market share is designated as a “market dominant business,” and subjected to regulation.

However, the law does not include additional telecommunication businesses such as search portals, online games, or e-commerce sites, so they are not subject to evaluation.

Therefore, Naver, with its almost 80 percent market share in the portal site market, is not currently under special regulations since it does not now qualify as a mainstay telecommunications businesses.

Last year, the government conducted studies on whether or not additional telecommunication businesses should be included so as to be under governmental regulation. The organization in charge, the Korea Information Society Development Institute (KISDI), published a report at the beginning of last year called “2013 Telecommunication Market Competition Status Assessment” that says, “Since Internet portal and search markets serve as a gateway in the Internet ecosystem, it is essential to conduct a study that delves into their relevant market demarcation.”

The statement can be interpreted as a tentative conclusion that among additional telecommunication businesses, portal search markets need to be subject to market status evaluations, and thus can be regulated if deemed necessary.

The ministry associate explained, “Compared to other additional telecommunication businesses such as games and e-commerce, portal search businesses have larger sales and a greater impact on the general public as well as on other industries.”

However, as of now, no legal grounds can justify the evaluation of portal companies and other additional telecommunication companies, so it is yet to be determined whether or not specific evaluation will be actually carried out.

Presently, a revision to the Telecommunications Business Act that was proposed in the National Assembly is still pending. It will enable competition assessment of additional telecommunication companies so as to be treated like mainstay telecommunication companies.

The ministry is planning to hammer out concrete methodologies so that it can embark on its probe once the law gets the green light.

A ministry associate said, “As soon as the legal ground is paved, we will assess portal companies, but we are lacking in data since we have never evaluated portal companies before. We will ask for cooperation from portal companies themselves to secure basic data and then later will map out evaluation methods.”

In the meantime, according to the portal companies, they raised issues at the meeting such as KISDI’s research methods last year and the exclusion of overseas businesses such as Google in the ministry’s scope of market competitiveness status analysis.