June 26, 2017 7:52 pm JST

South Korean antitrust agency moving to control Google, Facebook

Watchdog chief warns IT companies about indiscreet information gathering

KIM JAEWON, Nikkei staff writer

SEOUL -- South Korea's antitrust watchdog is joining a global trend to regulate internet companies such as Google and Facebook over their indiscreet collection of information on the web, with the aim of limiting any monopoly they might have on the use of big data.

The Fair Trade Commission said on Monday that it would strengthen its monitoring on information companies that are drawing the scrutiny of regulators over their collection and use of data in cyberspace.

Google is harnessing big data for its business, offering analytical services for corporate and individual customers. Facebook is also collecting a wide range of information from its more than 1.9 billion users and analyzing this for the benefit of its business.

"We are definitely interested in this emerging market. We are reviewing cases in foreign countries and will study more so as not to be left behind," said Yoo Young-oak, a director at the FTC.

His comments are in line with those of FTC Chairman Kim Sang-jo, who has criticized information technology companies for taking a free ride on the country's internet networks.

"We established networks with taxpayers' money, but they are collecting information and paying nothing," Kim told Yonhap News Agency in an interview on Sunday. He said that in the so-called fourth industrial revolution, sparked by fast-developing technologies, early comers can hoover up the market, leaving little for those that arrive later.

The move comes as the Japanese government is considering designating the use of a dominant market position to collect and monopolize such data as an antitrust violation, seeking to prevent any company from gaining exclusive access to big data.

Artificial intelligence has allowed companies to use data to improve the quality of their goods and services. But the trend also means that successful companies tend to accumulate the most useful data, while the consumer's power in the market declines.

In China, the government began enforcing its new cybersecurity law governing data collection earlier this month, as foreign companies brace for the impact it could have on their businesses. The new law's essential features are requirements that companies store collected customer information within China and that approval must be granted before transmitting that data out of the country.

To cope with tough regulations from government authorities, Google is changing its way of business to be more careful about collecting customers' information. Last week, the Silicon Valley company announced that starting later this year it would not scan Gmail content in order to target ads at users of the service.

"Consumer Gmail content will not be used or scanned for any ads personalization after this change. This decision brings Gmail ads in line with how we personalize ads for other Google products," said the company in a statement.

Earlier this month, the Indonesian government said that it had reached a tax settlement with Google for 2016, following a months-long dispute over allegations that the search company had not made enough payments to the government in Jakarta. Finance Minister Sri Mulyani Indrawati told journalists that the government had an agreement with the company, but declined to disclose the figures.

Thailand is also moving to strengthen tax collection rules for internet and technology companies.

Last year, Google agreed to pay 130 million pounds ($165 million) in back taxes to settle a probe by Britain's tax authority.

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