Naver, Kakao chiefs call for actions to address reverse discrimination vs foreign players

Lee Hae-jin, Naver founder and global investment officer [Photo by Han Joo-hyung]

Chiefs of South Korea’s top internet tech firms Naver and Kakao vowed to go more aggressive in global foray to address the dominance issue on home turf while asking for government and legislative attention to reverse discrimination versus multinational platform operators.

Lee Hae-jin, Naver’s founder and global investment officer, and Kim Beom-soo, Kakao’s founder and chairman, were summoned to a parliamentary hearing on Thursday to respond to the accusations that their companies are harming other domestic players with their monopolistic market presence.

Agreeing on the importance of fair competition, the heads of the country’s top internet tech companies vowed to double down on efforts to seek more business opportunities abroad.

They at the same time called for political attention on reverse discrimination in the local market as multinationals like Netflix can easily profit and proliferate by avoiding local regulations.

Fair completion will be possible when foreign companies pay for the network usage under the same billing standards as the local companies, argued Lee, referring to the latest controversy over Netflix, global streaming giant accused of “free-riding” despite causing a huge surge in network traffic from Squid Game and other hugely popular TV series.

Kim Beom-soo, Kakao founder and chairman [Photo by Han Joo-hyung]

Naver reportedly pays 70 billion won ($60 million) in network usage fee a year and Kakao 30 billion won. However, foreign firms providing internet-based service in Korea, like Netflix and Google’s Youtube pay nothing to local network operators, although they account for huge portion of local network usage.

Kim joined by asking policy makers to help create an environment for fair competition. He voiced concern for losing competitive edge against foreign players due to possible reverse discrimination caused by legal guidelines and regulation.

Naver and Kakao have been under fire for their sprawling business expansion through their dominant position in the local internet service market. Naver offers e-commerce to mobile payment service and web comics on top of running the country’s No. 1 search engine. Kakao, operator of Kakao Talk, a chat app that almost all Koreans use, has rapidly adding more services, from mobile banking to entertainment and taxi hailing.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]