The remand trial has begun in the lawsuit that Naver filed to contest a sanction by the Korea Fair Trade Commission (FTC) for allegedly prioritizing its own content in video search results. It is the first hearing after the Supreme Court overturned the portion that Naver lost and sent the case back to the Seoul High Court.
According to legal sources, the Seoul High Court's Administrative Division 6-1 (High Court Judges Kim Min-gi, Choi Hang-seok and Park Young-ju) held the first hearing on the remand in the suit Naver filed seeking to revoke the corrective order and the penalty surcharge payment order issued by the Korea Fair Trade Commission (FTC).
In Jan. 2021, the Korea Fair Trade Commission (FTC) issued a corrective order and imposed a 200 million won penalty surcharge on Naver, saying Naver adjusted its video search algorithm so that Naver TV content would appear above competing platforms' content in search results. Naver contested the decision and filed an administrative lawsuit in Feb. that same year.
The Korea Fair Trade Commission (FTC) found that in Aug. 2017 Naver classified some Naver TV videos as a "theme section" and gave those videos extra points. It said Naver TV videos that received extra points appeared higher in search results than videos from other video platforms. The Korea Fair Trade Commission (FTC) determined this was Naver unfairly favoring its own service.
Before remand, the Seoul High Court ruled in Feb. 2023 partly in favor of the Korea Fair Trade Commission (FTC). However, in Nov. last year, the Supreme Court overturned the portion Naver lost and sent the case back to the Seoul High Court. The Supreme Court found that Naver could design its search algorithm independently, and that giving extra points to theme section videos had a certain rational basis and served user convenience.
At the hearing, the Korea Fair Trade Commission (FTC) argued that the Supreme Court premised some facts differently. The Supreme Court viewed that Naver granted extra points after reviewing the quality of individual videos, but in reality, extra points were applied based on whether the videos were listed in the Naver TV theme section, not on video quality.
The Korea Fair Trade Commission (FTC) argued that even when the same producer supplied the same video and thumbnail separately to Naver TV and a competing platform, the search rankings differed significantly. It said Naver TV videos appeared on the first page, while competing platform videos were placed on later pages.
Naver countered that there is no new evidence or change in facts that would overturn the Supreme Court's findings. Naver's position is that the materials the Korea Fair Trade Commission (FTC) presented that day were already fully addressed at the Supreme Court.
Naver has previously argued during the lawsuit that the theme section was intended to provide users with quality service, and that it had also informed competitors of the information the Korea Fair Trade Commission (FTC) took issue with.
The court scheduled a second hearing for Oct. 14. The Korea Fair Trade Commission (FTC) plans to submit additional briefs by then regarding the method of granting extra points for Naver TV theme sections and the rationality of those extra points.