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South Korea: Google Raided Over Alleged Antitrust Violations

Google's South Korea offices have been raided once again as the country's largest mobile search operators raised a claim that Google unfairly discouraged competition by limiting search engine options in Android handsets. The South Korean regulator accepted this argument and stormed Google's Seoul offices on September 6, 2011, reigniting numerous debates online about whether it was a fair decision and what motives lie behind such harsh action.

It is the third time Google Korea has been raided. The first raid was in August 2010, over a large amount of traffic information Google accidentally collected during its Google Street View project. The second raid came in May this year after the allegation that AdMob, Google's mobile advertising unit, had gathered personal location data without permission.

Google and Naver Apps

Image of Google and Naver Apps on phone, by Lee Yoo Eun (CC-BY-2.0)

This time, South Korea's two largest search engine companies, Naver(NHN Corp) and Daum Communications filed a complaint with the Korean Fair Trade Commission (KFTC) in April 2011 that the Android mobile phone operating system unfairly hinders competition by setting Google's search engine as the default option, making it difficult for users to switch to different portals. They also argued that Google continues to discourage competitors by delaying OS certification for phone manufacturers.

Even to Koreans who regularly visit the two local portals, the companies’ argument was widely seen as irrational, or even ungrateful. Kang Min-soo (@bombshots) tweeted [ko] that it is only natural for Google search to be pre-loaded on Android, and that Naver and Daum should be thankful they are even allowed onto the device:

구글압수수색 들어갔다고. 안드로이드에 구글기본탑재가 불공정거래? 윈도우에 IE 기본탑재는? iOS 검색기본이 구글인거는? 그나마 무료로 재워줬더니 주인보고 안방에서 나오라는 꼴.

So they raided Google. They claimed that pre-loading Google on Android phones was unfair […] What about [Internet Explorer] installation on Windows? Or about Google being the basic search engine on the [iPhone] iOS? This situation is like a landlord who allowed a guest to stay at his place for free, but is on the verge of being kicked out from the master bedroom by that same guest.

J.S. Park (@unclecow) tweeted [ko]:

경쟁력없는 것도 부끄러운 일인터인데 법이 이러쿵 저러쿵 하는 걸 보니 안쓰러울뿐이다. 기분 나쁘면 네이버OS,다음OS만들어서 네이버폰,다음폰 만들어~ 너희들도 네이버폰이랑 다음폰 만들면 구글검색 이용 못하게 할꺼면서.

It is already shameful that they [the Korean companies] lack competitiveness, but that they so brazenly ramble on about this and that law article. It is almost pitiful to watch. If you dont like the situation, then create your own OS, such as Naver OS or Daum OS and make your own cell phones, Naver Phone and Daum Phone. If this happened, you would never allow Google to be pre-loaded onto your devices.

Many also accused the Korean regulator for being inconsistent in judging antitrust violations. Blogger 어설프군YB pointed out [ko] that while Naver enjoys dominant position in the search market despite numerous anti-trust allegations, Google who only has about a 15 percent market share was raided.

한국에서 독과점 형태로 모든 온라인 사업에 주도적 역할을 하고 있는 상황에서 […] 여러 면에서 산업 발전을 저해하는 정책을 펼치고 있습니다. 특히나 네이버는 검색시 자사 DB 즉, 네이버가 구축한 블로그, 카페등의 검색 비율을 높임으로 인해 70% 이상의 검색을 독점하고 있는데도 이와 관련해서는 조사를 진행하지 않고 구글에게 문제를 제기한다는 것자체게 어처구니 없는 접근이 아닐까 생각됩니다.

These major Korean portal sites have formed an oligopoly and are playing major roles in almost every web business. But they block development by enforcing their monopolistic policies. And in the case of Naver, they manipulate the search results by directing users to first visit Naver blogs and Naver community sites [before they visit other platforms] keeping people within their network. This manipulation enabled Naver to hold on to more than a 70 percent share of the Korean search market. Questioning Google before they ever investigate Naver is an incomprehensible approach to solving antitrust issues.

Worrying that these series of raids may chill freedom of speech online, activists railed against the government's decision. The international digital rights organization Electronic Frontier Foundation (EFF) in the United States even sent an open letter to the Korean Communications Standards Commission (see Jillian York's commentary). Several bloggers who tried to read between the lines, raised suspicions that this is a strategy of the government to ‘tame’ Google who has refused to follow certain local laws that may restrict online freedom of expression or undermine people's privacy.

Blogger ‘Photography is Power’ wrote [ko] about Google's ongoing conflict with the Korean government that has continued over several years:

수사할것이 있으면 해야죠. 그런데 이 구글 압수수색을 곱지 않게 보는 네티든들이 많습니다. […] 네이버나 다음입장에서는 국내 실정법을 따른 것 이겠지만  자사의 고객 정보를 경찰 영장 하나로 고객에게 당신 정보 경찰에 열람토록 하겠습니다 라는 통보도 없기 그냥 보여줍니다.[…] 2년전 4월  국내는 유튜브 실명제 도입으로 뜨거웠습니다.  동영상도 실명제를 통해서 올려야 한다는 것이죠. 한국법이 그러니 너희도 따르라고 압박을 했습니다. 그러자 구글코리아는 꼼수를 냅니다. 한국지역을 설정하면 업로드를 못하게 막아 놓았죠. 하지만 지역설정을 한국 이외로 하면 올릴 수 있습니다.[…] 구글코리아는 표현의 자유를 억압하는 실명제를 거부했습니다.

If there really is something to investigate, then we should investigate Google. But quite a few net users have cast suspicious glances at this raid. […] In the case of Daum and Naver, the police has full access to their customer information whenever an arrest warrant is issued. Police can access all the information even without prior notification. The companies can just argue that they are following local laws.[…] Two years ago, in April 2009, YouTube’s real name verification system heated up online debates in South Korea. Back then, the Korean regulator insisted that people need to upload videos using their real names, and forced other foreign websites to follow this law. Then Google found a loophole; they blocked people from uploading a video if their country setting was South Korea. But simply by switching the setting to another country, one can upload a video from South Korea [using any name] […] Google Korea argued against the real name verification law since they said it would restrict the freedom of expression of their users.

The blogger also noted that Google Korea seemed “lackluster” in recent months after a localization project failed to materialize and they lost a tight partnership with Daum. But he still expressed support for Google, describing it as “the only company that can break down the language barrier”. He suggested Google should streamline translation services in order to better survive in the hostile Korean online ecosystem.

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