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Technology

South Korea slaps Naver with $23m fine for rigging search results

Watchdog says algorithm favored group's online mall over rival sites

Naver commands more than a 70% market share in South Korea's online shopping searches. (Photo by Kotaro Hosokawa)

SEOUL -- South Korea's antitrust watchdog has ordered leading domestic tech group Naver to pay a fine of 26.7 billion won ($23 million) for engineering search results to favor products sold on its online mall.

Naver, which commands a share of over 70% in domestic e-commerce searches, displayed products sold by partner vendors at the top of search results, the Korea Fair Trade Commission said Tuesday. Goods sold by competing e-commerce sites were relegated to lower-ranked results, according to the commission.

The antitrust commission said Naver manipulated its search algorithm at least six times between 2012 and 2015 to produce those outcomes, amounting to an abuse of market dominance.

Naver disputed the findings and said it will fight the decision in court.

The tech giant said in a statement that it changed the algorithms to improve user experience and that the tweaks were unrelated to suppressing rivals. Noting that it changed the algorithms about 50 times between 2010 and 2017, Naver accused the commission of cherry-picking specific cases.

The commission has proposed a bill to rein in unfair business practices by online platform operators. The new legislation would apply to Naver as well as to U.S. tech groups like Google and Apple. The bill is expected to become a law as early as 2022.

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