By Cho Mu-hyun
The Fair Trade Commission (FTC), the nation's antitrust regulator, is investigating NHN, the operator of dominant portal Naver, for possible unfair business practices, industry officials revealed Tuesday.
The regulator launched the investigations officially on Monday and went to the Internet giant's headquarters in Bundang, Gyeonggi Province, and held on-site inspections and collected documents, according to a FTC spokesman. He declined to give further details, only saying the probe was ongoing.
"We will cooperate fully with the FTC," said NHN spokeswoman Lee Won-mi, but refused to give possible reasons behind the investigations.
NHN owns Naver, which holds a dominant market share of over 70 percent in the local portal market ahead of rivals Daum and Nate.
Industry officials believe that the FTC will look into whether the company uses its position unfairly against lesser partners.
It is speculated that the regulator collected evidence prior to the investigations to prove that NHN was a dominant player in the market with significant power gained by throwing its weight around.
The company has tremendous power over advertisers and software developers among others in the market due to its popularity on desktops, which is increasing in the expanding mobile platform thanks to its messenger service LINE.
There were numerous rumors last year that the FTC was looking into the company but this is the first time the regulator has made a public admission.
NHN have been trying to compensate for its image as a monopoly-holder in the market by offering higher ratio returns to developers over earnings and holding forums for them. It also strongly supports helping small and mid-sized enterprises.
It was also heavily criticized last year for extending its power into other markets besides its core Internet business, by venturing out into areas such as real estate and wholesales market that many say kills smaller firms.
In 2008, the FTC imposed a fine of $227 million won against NHN for the same antitrust allegations, the largest ever for a portal company. The Seoul High Court took the side of the Internet giant, and the trial is ongoing in the Supreme Court of Korea.
NHN also previously filed a separate complaint to the FTC against its American rival Google, saying the latter abused its power over the Android platform widely used in mobile devices by having its website preloaded.