Facts
The Korea Fair Trade Commission (KFTC) found that Naver, overhauling its ad-supported free video search algorithm in August 2017, favoured its own video service in two ways. It gave key information on the new algorithm to its own video unit but withheld or misstated it to rival search-partner platforms; and from 24 August 2017 to 28 August 2019 it unconditionally boosted the relevance score of videos in the 'Naver TV theme section'. Treating both as deceptive customer inducement under Article 23(1)(iii) of the former Fair Trade Act, the KFTC issued a corrective order and fine on 25 January 2021. Announced as KRW 200 million in October 2020, the fine appears as KRW 300 million in later reports; the exact figure is unverified.
Question
The question was whether a search platform that also runs its own video service induces customers by deception when its algorithm adds points to videos in one of its sections, leading users to think its videos are markedly better than rivals'. On 9 February 2023 the Seoul High Court, which hears challenges to KFTC orders at first instance (2021누35218), set aside the fine in full and found no deception in the information-sharing conduct, but held that the scoring boost was deceptive inducement. Naver appealed on the boost and the KFTC on information sharing. The Supreme Court considered whether a platform owes rival videos equal treatment and how a misperception of 'marked superiority' must be proved.
Decision
On 6 November 2025 the First Division unanimously set aside the part of the judgment Naver had lost, remanded it to the Seoul High Court and dismissed the KFTC's appeal. A platform has no general duty to treat its own videos and rivals' equally; it may design its display and ranking algorithm on its own value judgments and business strategy, without disclosing them. An algorithm becomes unlawful only if it is deceptive and risks harming consumer choice or fair competition. The boost applied only to theme-section videos that passed extra internal review and could have a reasonable basis. The KFTC had to prove a misperception of marked superiority, and its data on rising impressions and views did not suffice.
Why it matters
Delivered three weeks after the Naver Shopping judgment, the ruling addresses search-algorithm self-preferencing under the ban on deceptive customer inducement. The Supreme Court did not treat weighting one's own content in a ranking as deception in itself and required concrete proof that consumers were misled. It also said the European Commission's Google Shopping decision could not be carried over directly, as the markets, facts and legal basis differ. On remand, the Seoul High Court's Administrative Division 6-1 held its first hearing on 8 July 2026 and set a second for 14 October 2026.
Related stages
The KFTC announced the video search and shopping search cases together in October 2020. The Supreme Court's judgment of 16 October 2025 on Naver's shopping search algorithm is covered in a separate entry.