KOREA: Bill to check abusive power of Internet portals
Major portal sites fear regulations will hinder growth of the domestic search engine industry
The Korea Times
Wednesday, May 16, 2007
By Lee Jin-woo
A lawmaker is to submit a bill to impose more restrictions on Internet search engines, especially giant local Web portals, to the National Assembly in the near future.
The envisioned bill calls for portal sites to protect privacy and rights of Internet users as well as to maintain ethics in journalism and advertising on the web. But major portal sites argued that the regulation would hinder the growth of the domestic search engine industry.
Rep. Chin Soo-hee, former vice spokeswoman of the main opposition Grand National Party (GNP), said at a National Assembly hearing Tuesday that she and her aides have already prepared a draft bill to regulate portal sites.
Chin said, "Portal sites such as Naver and Daum have almost monopolized the local market, but they have neglected their duty to protect the privacy and human rights of Internet users."
According to a survey by AceCounter, a local market research firm, Naver maintains more than 70 percent of the local market with its user-friendly services, far higher than the 2 percent of Google Korea.
Lim Duk-gi, main architect of the draft bill, said portals' keyword advertisements, the main resource of search engines, have failed to guarantee quality search results by focusing too much on providing sponsored links under the name of South Korea's unique "integrated search engine services."
Lim, a researcher at the Korea Intellectual Property Right Legislation Institute in Seoul, asserted that local portals should allow users to choose either the integrated search services, which contain information compiled by each portal site, or an open research service similar to the one provided by the world's largest search engine Google.
He, however, refrained from naming a company during the debate.
Officials from Naver and Daum rebuffed such claims, arguing that the bill could hinder the development of local Internet portals, which have accomplished fast-paced growth in one of the world's most wired countries.
"Due to the limited number of contents available in the Korean language, we have developed our unique user-friendly search services, which enjoyed much higher popularity than foreign Web portals such as Google on the local market," said an official of NHN which runs Naver.
A Daum Communications spokesman claimed coercing local portals into adopting certain types of search engine services would discourage each company's creative services and cement the current dominant positions of leading portal service providers.
Portals' increasing role as news service providers also faced much criticism.
"Major portal sites have become much more influential than traditional news media including newspapers and television stations," Chin said. "But there's no legislation to prevent possible defamation and online witch hunts on those Web sites that more than 10 million users visit per day."
Lee Ji-ho, a lawyer who has cooperated with the lawmaker in preparing the bill, said the major portals should not be allowed to change the headlines of articles provided by news media under any conditions.
"Besides, news services by such Web sites must be supervised by those with noteworthy experience in journalism, with a strong code of ethics," Lee said.
Chin also claimed the portals should be required to help Internet users report inappropriate contents on the Web immediately to them.
"Those portal sites should make it easier for Internet users to report problematic postings on their sites," the lawyer said. "We need new legislation to make sure portal sites take appropriate steps within 72 hours."
Participants also called on major portals to find ways to encourage start-up Internet contents providers.
"I wonder how many small contents providers have benefited from their business partnership with such giant portal sites," said Yoo Jung-won, vice president of Allblog, a Web site specializing in blog services, which recently cancelled its contract with Naver. "I've seen too many cases where giant portals list information at the bottom of their pages because they wanted to promote their own contents."
With its increasing market share and profits, local portals have faced a series of anti-trust and tax audit measures.
The National Tax Service (NTS) began a three-month audit of NHN late last month.
In the first quarter of this year alone, NHN's net income amounted to 62.38 billion won ($67.65 million), up 77.6 percent from 35.11 billion won a year earlier.
Revenue from its successful search-related online advertisements and games surged 63.9 percent year-on-year to 199.62 billion won and operating profit jumped from 83.8 percent to 85.63 billion won, it reported last week.
Date Posted: 5/16/2007