Year in review: dominance and monopolies in South Korea

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Year in review

The Korea Fair Trade Commission (KFTC) is an agency with authority to enforce the Monopoly Regulation and Fair Trade Act (MRFTA). The KFTC has shown interest in the abuse of market dominance of online platform operators.

In December 2024, the KFTC issued a remedial order and an administrative fine of approximately 15 billion won on Kakao Mobility, a Korean taxi service provider, for abusing its dominant position in the standard taxi-hailing service market.³ Kakao Mobility had required competing franchise taxi companies to enter into contracts obligating them to share trade secrets in real time. Companies that refused to sign such contracts saw their affiliated taxis denied access to Kakao Mobility’s taxi hailing service. The KFTC concluded that this conduct constituted both an abuse of market dominance and an abuse of superior bargaining position (one of the unfair trade practices prohibited under Korean competition law).⁴

In another case, the KFTC had imposed an administrative fine on Google finding that Google abused its market dominance. Google had already been sanctioned by the KFTC in 2021. In July 2023, the KFTC imposed an administrative fine in the amount of around 42 billion won on Google for excluding its competitor by providing various benefits to game companies on the condition that they do not deal with One Store, an app store that competes with Google.⁵

If the KFTC imposes remedial orders and a surcharge on a company suspected to have abused its dominance, the violator may file an administrative lawsuit against the KFTC by submitting a complaint to the Seoul High Court. The decision of the Seoul High Court may be appealed at the Supreme Court.

The Supreme Court of Korea issued a decision on the abuse of dominance by a company that holds standard essential patents (SEPs). In April 2023, the Supreme Court issued a decision upholding the Seoul High Court's finding that the KFTC's disposition of imposing an administrative fine in the amount of 1 trillion won on Qualcomm was lawful.⁶ The Supreme Court held that Qualcomm used its dominance in the SEP licence market and modem chipset market for each standard to mutually and organically link Conduct 1 (refusing to execute and limiting patent licence agreements with competing modem chipmakers) and Conduct 2 (executing patent licence agreements with handset manufacturers by linking modem chipset supply agreements with patent licence agreements) and found that there was anticompetitive intent and effect. However, the Supreme Court rejected the KFTC's finding of disadvantageous contract terms, including royalty terms, offered to handset manufacturers.⁷

In November 2024, the Supreme Court upheld the Seoul High Court’s February 2020 decision overturning the KFTC’s decision that Siemens had abused its market dominance.⁸ Back in March 2018, the KFTC had issued remedial orders and imposed administrative surcharges on Siemens, alleging that the company had excluded small- and mid-sized enterprise (SME) competitors from the maintenance service market for its CT and MRI equipment. The KFTC argued that Siemens abused its dominant position by applying discriminatory conditions — such as differences in price, functionality and the time required to issue service keys – based on whether a hospital that had purchased Siemens equipment opted to receive maintenance services from a competitor. However, the Seoul High Court found no established trade practice requiring the provision of essential software for maintenance services free of charge. Accordingly, Siemens’s practice of charging certain hospitals for service keys did not violate normal trade practices. The Supreme Court agreed, ruling that providing software service keys at no cost could not be considered a 'normal trade practice', and therefore, Siemens' conduct did not constitute an abuse of dominance.

In January 2024, the Seoul High Court upheld a fine of approximately 200 billion won imposed on Google by the KFTC.⁹ The fine was levied for Google's actions in interfering with the business activities of competitors by executing a mobile service licence agreement and osperating ystem (OS) early access agreement with handset manufacturers, including Samsung, and preventing them from manufacturing devices installed with a modified version of Android. The court, as in the Naver case, held that sanctions could be imposed even if the markets where dominant position and anticompetitive effects are of concern are different. Google filed an appeal with the Supreme Court.

Other abuse of dominance cases that are currently pending at court are listed below.