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Korea Fair Trade Commission slaps fines on bar associations

Korea Fair Trade Commission slaps fines on bar associations

Posted February. 25, 2023 07:47,   

Updated February. 25, 2023 07:47


The Korea Fair Trade Commission has imposed fines on the Korean Bar Association (KBA) and the Seoul Bar Association (SBA) and issued a correction order to them for prohibiting the use of the LawTalk app, a legal consultation platform that offers legal advice to users. The antitrust regulator's decision comes in response to the ban on lawyers advertising themselves on the app, which is deemed a violation of fair and free competition in the market and restricts consumers' right to choose lawyers. The antitrust regulator also considered the KBA's punishment of lawyers who used the app for self-promotion to be an overreach of its authority. However, the KBA has refused to accept the decision and has vowed to launch a legal battle against the KFTC.

Startups with new information service platforms that have come into severe conflict with incumbent businesses have welcomed the KFTC's punitive action against the bar associations. For example, Samjeomsam provides a comprehensive income tax report help service and tax refund service, GangnamUnni is a platform with information on plastic surgery, DoctorNow offers video consultations with doctors, and Zigbang is a real estate app. These startups conflict with the Korean Association of Certified Public Tax Accountants, the Korea Medical Association, the Korean Pharmaceutical Association, and the Korea Association of Realtors, much like LawTalk and the bar associations.

LawTalk filed a complaint with the KFTA against the bar associations for their alleged unfair practices in June 2021, but the decision was made just now after one year and eight months. The KFTC has faced criticism for its decision coming out too late, causing unnecessary conflicts and confusion. Law & Co, the operator of LawTalk, is now facing difficulties and has asked half of its employees to resign voluntarily, as the app's number of members has halved from 4,000 due to the punitive actions by the bar association.

In 2019, the National Assembly passed the so-called Tada Prohibition Act due to the backlash from the taxi industry, which took away an opportunity to resolve traffic congestion by introducing innovative services. As a result, many platform startups ceased doing business in Korea. SoCar, a car-sharing service, is now operating in Malaysia and Indonesia, where no regulation prohibits its business.

Platforms that promote healthy competition among professional service providers and reduce service fees are the ones that can invigorate our society with new energy. Advances in generative AIs are as revolutionary as the innovation of the Internet and the smartphone, and will bring about diverse business opportunities beyond our imagination. It is time for professional service providers to seek ways to coexist with innovative technology. The government should also accelerate its efforts to eliminate regulations that hamper innovation while mediating conflicts between platforms and associations.