The Fair Trade Commission revealed that Korea's top search engine Naver has been manipulating search algorithms to favor certain businesses.
Naver Corp, the company behind the largest search engine in Korea, has been accused of manipulating the search algorithms to show the company's online shopping sites at the top of the search results. The company has been increasing its own sales through this method as it exposed Naver-related products and videos at the top of the search results.
In turn, Naver has been given a fine of 26.5 billion KRW (~22.9 million USD). The Fair Trade Commission also stated that it will impose a correction order along with the fine for obstructing competitors' business activities.
According to the Fair Trade Commission, Naver started its open market service in 2012, and 20% of the 40 products displayed on the first page of the search results consisted of the products from Naver's open market.
The Fair Trade Commission also believes that Naver manipulated the search algorithms to increase the frequency of exposure of its open market products and reduced the exposure of products sold in other competitive open markets.
As a result, Naver's market share rose from 4.97% in 2015 to 21.08% in 2018. According to the Fair Trade Commission reports, Naver made algorithmic changes in favor of their open market at least six times between 2012 and 2015.
Naver also increased its exposure frequency by giving extra points to videos supplied by "Naver TV" in the video streaming sector, and the FTC also imposed a correction order and a fine of 200 million KRW (~171,715 USD) on the act.
A Fair Trade Commission official stated that "This is the first time that a platform operator has been sanctioned for unfairly enticing consumers by manipulating search algorithms. We will continue to monitor unfair practices by platform operators."