A Seoul court has fined Naver 200 million Korean won for violating antitrust laws by deliberately obstructing competitors in the online real estate information market. The ruling addresses actions taken by the tech giant between 2015 and 2017 to maintain its dominant position.
The Seoul Central District Court found that Naver used exclusive contracts with real estate data providers to prevent them from supplying information to rival platforms, most notably Kakao, which was attempting to enter the market at the time.
Key Takeaways
- Naver was sentenced to a 200 million Korean won fine for violating the Monopoly Regulation and Fair Trade Act.
- The court ruled Naver unfairly blocked competitors by forcing real estate partners into exclusive data-sharing agreements.
- The anti-competitive behavior occurred between May 2015 and September 2017.
- This legal action follows a 1.032 billion won penalty issued by the Fair Trade Commission in 2020 for the same conduct.
Court Delivers Verdict on Naver's Market Practices
On September 18, Presiding Judge Lim Hye-won of the Seoul Central District Court’s Criminal Division 19 handed down the 200 million won fine, a figure consistent with the amount prosecutors had requested during the final hearing last month. The court's decision centered on Naver's deliberate efforts to stifle competition.
Judge Lim stated that Naver's actions were a clear abuse of its market-dominant position. The court determined that the company's behavior was designed to exclude rivals and consolidate its control over the lucrative real estate listings sector.
“Naver exclusively secured real estate listing information to exclude competitors and unfairly prevented partner companies from providing information to third parties. Such market-dominant behavior must be eradicated, and severe punishment is necessary.”
The ruling emphasized the broader negative impact of these practices. By limiting the flow of information, Naver not only harmed potential competitors but also restricted choices available to consumers seeking property information.
Strengthening a Monopoly
The court further elaborated on the consequences of Naver's strategy. “Naver blocked potential competitors through its partner companies and strengthened its monopolistic position,” the judge noted.
This strategy, the court concluded, had significant societal repercussions. It limited business opportunities for smaller real estate information companies and ultimately reduced the diversity of services available to the public, creating a less competitive and innovative market.
Timeline of Events
- February 2015: Kakao announces plans to enter the real estate information market.
- May 2015 - September 2017: Naver enforces exclusive contracts with data providers.
- December 2020: The Fair Trade Commission fines Naver 1.032 billion won.
- November 2021: The Ministry of SMEs and Startups requests a formal complaint.
- September 2022: Prosecutors indict Naver, leading to the trial.
- September 2025: The Seoul Central District Court issues a 200 million won fine.
Background of the Antitrust Case
The case dates back to early 2015 when Kakao, one of Naver's primary competitors in South Korea, signaled its intention to launch a real estate information service. This move was perceived as a direct threat to Naver's established dominance in the sector.
In response, Naver took decisive action during contract renegotiations with its real estate information partners. The company introduced a new, highly restrictive clause into its agreements.
The Exclusive Contract Clause
The critical element of Naver's strategy was a contractual stipulation that forced its partners into exclusivity. The clause explicitly stated: “The real estate listing information provided to Naver will not be given to third parties.”
This single provision effectively locked out competitors. Real estate data providers, reliant on their partnership with the country's leading portal, were contractually barred from working with any other platform, including the emerging service from Kakao.
As a result, from May 2015 to September 2017, Naver received property listings on a virtually exclusive basis. This created a significant barrier to entry for any new company attempting to compete in the online real estate space.
Regulatory Scrutiny and Investigation
Naver's actions first drew the attention of government regulators several years ago. In December 2020, South Korea's Fair Trade Commission (FTC) concluded a thorough investigation into the matter.
The FTC determined that Naver had violated the Fair Trade Act. As a consequence, it issued a formal corrective order and imposed a substantial penalty of 1.032 billion Korean won, highlighting the seriousness of the infraction from a regulatory standpoint.
Regulatory Precedent
The court's fine of 200 million won is separate from the earlier administrative penalty from the Fair Trade Commission. The FTC's 1.032 billion won fine in 2020 was a regulatory action, while the recent court case represents a criminal proceeding for the same violation, initiated after a formal complaint was filed.
The case escalated further in November 2021. The Ministry of SMEs and Startups, advocating for smaller businesses potentially harmed by Naver's conduct, officially requested that the FTC file a criminal complaint. This request triggered an investigation by prosecutors.
Following the investigation, prosecutors formally indicted Naver in September 2022, bringing the case to trial and culminating in the recent court ruling. The verdict reinforces the legal and regulatory stance against anti-competitive practices by dominant technology platforms in South Korea.
