Access to online shopping search data mulled to prevent manipulation

[Photo by MK DB]

Naver Shopping, Coupang and Baedal Minjok could face requests from their merchant members to unveil specific search algorithm data when the rankings of their online shopping products are suspected to be manipulated, according to a plan being studied by the government.

This is a move to monitor and prevent any foul play by South Korea’s big platform companies on recommendations of products and services without the intervention of regulators.

The idea is part of the measures for the development of digital platforms released during an emergency ministerial meeting on economic affairs held on Thursday. It emphasizes self-regulation between platforms, users and stores, said Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho.

Key to the platform self-regulation is to empower merchant members to access search algorithm data. Previously, the Fair Trade Commission (FTC) investigated Naver Shopping and Kakao Mobility over market-power abuse claims.

Back in 2020, Naver was fined 26.5 billion won ($21 million) for changing its algorithm to squeeze competitors and promote its own shopping and video services. Naver is still in a legal battle against the FTC on this issue.

If merchant members can directly access such data, they can autonomously prevent platforms from abusing power against rival brands, and it will be possible to claim damages from potential foul play later.

“It will be an excessive regulation to request the disclosure of search algorithms which are the trade secret of platform companies. During a discussion, the majority opinion is that merchant members should be given access to such data when the rankings of online shopping products are suspected to be manipulated,” said an official who participated in the self-regulation discussion.

Meanwhile, the government also disclosed a strategy to help nurture local platform companies especially in cloud as a service (CaaS), cyber security technology and large-scale artificial intelligence (AI) computing resources.