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Technology

Tech giants brace against Korea's new antitrust enforcer

Joh Sung-wook worried about power of Google, Facebook and Amazon

Big platform tech companies have become a key political and economic issue in South Korea amid rising concern over their monopoly power. 

SEOUL -- South Korea's incoming competition chief Joh Sung-wook appears to have taken a leaf out of European counterpart Margrethe Vestager's book as she sets her sights on tech giants including Google, Facebook and Amazon.

In her first media appearance since President Moon Jae-in nominated her to lead South Korea's Fair Trade Commission, Joh identified reducing data monopolies and enforcing better protections for customer information as two of her biggest priorities.

"We will analyze unfair activities of leading companies in the ICT sector, such as Google, Apple and Naver, which we are currently investigating," Joh told reporters in Seoul last week.

Joh's comments signal a shift in focus for the competition watchdog after outgoing commissioner Kim Sang-jo, known as the 'chaebol sniper', spent the last few years targeting the country's powerful family-run conglomerates.

After Kim's appointment as chief of the social and economic policy bureau inside the presidential Blue House, Joh, 55, will be the first female FTC chief in the agency's 38 year history. She is currently professor of economics at Seoul National University's business school.

Well-versed on corporate governance in South Korea's chaebols, Joh earned a doctorate in economics from Harvard University.

"She is an expert in corporate governance and corporate finance who has broken the glass ceiling several times with her expertise and academic accomplishments," said Koh Min-jung, spokesperson for the presidential Blue House. "We expect that she will push for the Fair Trade Commission's current issues smoothly based on her excellent expertise and reform mind as well as spread fair economy to our whole economy."

Tackling the power of global tech giants mirrors similar action being taken in Europe and Asia, including in Tokyo where the Japan Fair Trade Commission recently proposed heavy fines for tech companies that forced users to supply personal information.

In March, the European Union fined Google 1.5 billion Euros for abusing its online advertising monopoly. The EU is now probing Facebook's Libra cryptocurrency, and Amazon over its treatment of third-party sellers on its website.

Joh's comments come as powerful internet companies continue to expand their Asian footprint, making their presence felt in politics as well as business as they siphon huge volumes of personal data and other information from customers.

"Big platform companies have become a key political and economic issue as there are worries over their monopoly, fake news, and use of telecom networks," Kang Seo-jin, an analyst at KB Financial Group, told Nikkei Asian Review.

Currently investigating Google over bundled sales of its Android operating system and the potential abuse of its market dominance, the FTC is also probing Apple over passing on advertisement and after service charges to local telecom companies.

Earlier this year, the FTC ordered Google, Facebook, Naver and Kakao to change a total of 10 contract clauses which allowed excessive access to private information.

South Korea's finance ministry is also actively involved in international moves to impose digital taxes on cross-border internet companies.

Tougher regulations will pressure big tech to strengthen compliance, say analysts, forcing them to more accurately report revenues to authorities.

"I don't think platform companies will change their business models quickly because the digital tax is more about revenues," said Oh Tae-hyun, a senior researcher at Korea Institute for International Economic Policy.

In response to questions put by Nikkei Asian Review, Naver, Google and Apple declined to comment.

Speaking at a National Assembly confirmation hearing on Monday, Joh said that while she planned to continue her predecessor's tough stance against chaebols, she also vowed to reduce uncertainty by speeding up FTC processes.

"[The FTC] needs to enforce strict laws as a referee in the market economy, but [it] should help corporations make decisions quickly," Joh said.

Still, some conglomerates remain concerned over Joh's appointment, expecting her to soon try and flex her muscles.

"I think we may face more sensitive issues under her leadership," said a senior official at one conglomerate who asked not to be named. "She may want to exercise her own color as a newcomer which will add impacts on us."

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