South Korea’s largest website Naver was fined an unprecedented 26.7 billion won ($ 23 million) Tuesday for manipulating search results in favor of its own online shopping service.
Naver is an equivalent to Google in South Korea, with ubiquitous status in everyday life through services including its search engine, news portal, online shopping, and blogs.
It is the third-largest company listed on the major Seoul stock exchange, with a market capitalization of 50 trillion won, just behind memory chip giants Samsung Electronics and SK Hynix.
The Korea Fair Trade Commission, the country’s antitrust regulator, ruled that Naver modified the algorithms multiple times between 2012 and 2015 to raise the ranking of its own items above that of its competitors.
The operator introduced a system that “guaranteed that a certain percentage” of the top search results would be from its own online shopping service, the KFTC said in a statement.
The behavior amounted to “distorting market competition … misleading customers who believed they had received fair search results,” he added.
It is the first time that Seoul has punished a search operator for making algorithmic changes for its own benefit.
Naver dominates the South Korean online shopping search market with a share of more than 70 percent.
He rejected the ruling and promised to appeal.
“The core value of the search service is to present a result that matches the intentions of the users,” he said in a statement, adding: “Naver has been chosen by many users because of our focus on this essential task.”
“We do not accept the decision and we will dispute it in court.”