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KFTC Clears Platform Operator of Alleged Abuse of Superior Bargaining Position Regarding Pay-per-click Advertising Services


The Korea Fair Trade Commission (the “KFTC”), after investigation, cleared an online platform operator (the “Company”) of allegations that it had abused its superior bargaining position regarding its pay-per-click advertising services in violation of the Monopoly Regulation and Fair Trade Act.

The investigation was triggered by a complaint filed to the KFTC claiming that the ratio of clicks to actual orders was remarkably low, and that the Company did not provide a clear explanation of the criteria it used to decide the degree of exposure given to advertised products.

Representing the Company throughout the investigation, Kim & Chang managed to successfully demonstrate early on that the advertising service in question is a customary promotional method in light of the use of pay-per-click advertising services in related industries worldwide, and the fact that the Company had guaranteed its users predictability by providing them with appropriate prior notices regarding the details of its pay-per-click advertising product.  As a result, the KFTC issued a “no violation” decision, clearing the Company of all allegations.