FTC to probe Google’s alleged unfair practices in online search ad market

By Lee Min-hyung

The Fair Trade Commission (FTC) has decided to look into whether Google Korea unfairly exerted monopolistic influence while operating its search advertising business here, the antitrust watchdog said Monday.

The authority plans to investigate Google’s allegedly unfair ad sales activities here. The FTC said it started the investigation recently to look deeper into the platform giant’s digital advertising business structures and its sales activities by placing a research order aimed at collecting opinions and data.

The authority also leaves open the possibility of slapping sanctions on the tech giant after reviewing similar cases from overseas authorities.

“We will closely monitor the online ad sales market circumstances to figure out if any companies have violated the fair trade act here,” an official from the FTC said, but declined to comment further on what measures are being considered to regulate Google.

Google is suspected of hampering its potential competitors’ entry into the market and engaging in unfair cross-selling acts.

This is not the first time that the world’s largest portal operator has come to the watchdog’s attention. In 2021, the FTC carried out an all-out investigation into the nation’s digital ad market circumstances to examine whether monopolistic market players make unfairly pressing demands on customers, such as advertisers or advertising agencies.

The FTC is standing on a similar footing to its overseas counterparts in the United States and Europe, with the latter also stepping up criticism of Google, urging the company to disband its digital ad business division. In 2019, Google faced a fine of around 2 trillion won ($1.54 billion) from the European Union after it was caught forcing its advertisers to bear additional costs if they advertised on competing search engines.

Earlier this year, the Korean authority also conducted an on-site investigation into the headquarters of Google Korea for its alleged breach of fair competition by cross-selling its YouTube Music service for free for those subscribing to the dominating video streaming service. The watchdog looked into whether Google Korea expanded its market influence here by engaging in such unfair sales acts.

Google has in recent years caught flak from Korean authorities for not paying network usage fees here. According to the National Assembly’s recent annual audit, Rep. Kim Byong-wook from the ruling People Power Party pointed out that Google accounted for the largest amount of network traffic among overseas IT companies with 28.6 percent as of the fourth quarter of 2022, followed by 5.5 percent from Netflix. But the company paid nothing in network usage fees here during the same period.

“Google is apparently disregarding Korea, as the company pays network usage fees in the U.S. and Europe,” Kim said “We need to come up with regulatory measures for the company to pay the price fairly.”