Facts
The Korea Fair Trade Commission (KFTC) found that Naver had adjusted the Naver Shopping search algorithm several times so that products from sellers on its own open market, SmartStore, ranked above those from competing open markets. It issued a corrective order and a fine of about KRW 26.6 billion. The Seoul High Court, sitting as the first-instance court for KFTC decisions, dismissed Naver's challenge on 14 December 2022 (2021누36129). It held that leveraging dominance in one market to gain share in another was strongly anticompetitive and that Naver's faster growth in share, transaction value and seller numbers showed anticompetitive effects.
Question
The Supreme Court considered when self-preferencing by a dominant online platform amounts to unjust discrimination under Article 3-2(1)(iii) of the former Monopoly Regulation and Fair Trade Act. It also addressed who must prove anticompetitive effect and intent, and what must be shown when the effect is alleged in a market other than the one the firm dominates. Finally, it examined whether the algorithm changes could be treated as unfair trade practices, namely discrimination and inducement of customers by deception.
Decision
On 16 October 2025 the Second Division reversed and remanded. Discrimination is unjust only with an intent to maintain or strengthen a monopoly and a risk of effects such as higher prices, lower output or less innovation; the KFTC must prove both, self-preferencing platforms included. Effects alleged in another market must be shown to exist, or concretely threaten, in that market, and dominance alone creates no duty of equal treatment. As rivals' sales kept growing, the lower court had to ask whether Naver's growth reflected competition on the merits, given its diversity aim and trial-and-error algorithm design. Consumers knew the ranking did not rest purely on product attributes and had other sort orders, so neither unfair-trade charge stood.
Why it matters
The judgment sets out in detail, at Supreme Court level, the standards Korean competition law applies when a platform tunes its search algorithm to favour its own service. It stresses that the KFTC must prove anticompetitive effect and intent with concrete evidence. When it was delivered, other disputes over platform ranking and dispatch algorithms were pending before Korean courts.
Related stages
On remand, the Seoul High Court's 7th Administrative Division closed hearings on 28 August 2026; judgment is scheduled for 12 November 2026.