FTC expands probe into Naver`s unfair trading practices

The Fair Trade Commission that is probing whether Internet portal firm NHN engaged in unfair trade expanded scope to its affiliate NHN Business Platform in charge of real estate brokerage and knowledge shopping services. The commission is known to be focusing on whether NHN and NBP have infringed on online store sales using its monopoly position.

According to sources Tuesday, investigating agents at the anti-trust watchdog have been on an on-site investigation at the NBP headquarters in southern Gyeonggi Province since May 13.

A source said, "The agents are analyzing transaction records between NHN and NBP and accounting data."

NBP is an online advertisement sales subsidiary 100 percent owned by NHN. Also in charge of ad sales, it operates Naver Real Estate and Knowledge Shopping. It makes profits by brokering trading of properties and various products based on customers searching at Naver, which has Korea`s largest portal user base. Between 2009 when NBP was established and last year, NHN`s sales rose by more than 1 trillion won (898 U.S. million dollars).

NBP is criticized as the main culprit of infringement of online store sales. Since NHN began operating knowledge shopping and real estate brokerage with NBP, small-scale price comparison sites and online real estate information providers have closed or declined.

The Fair Trade Commission says market dominance in the Internet where NHN advanced into is due to NHN using its dominant position. The commission will investigate if there have been intra-deals or illegal support for subsidiary in the process of trading between NHN and NBP.