[비즈한국] Companies sometimes make decisions that are difficult to explain based solely on money. Understanding the laws or systems hidden behind them can help you grasp the deeper context. 'Useful Business Tips (Bijeop)' introduces clues to help understand business trends.
If one were to pick the case that sparked the greatest debate among fair trade rulings in 2025, it would be the Supreme Court ruling that deemed Company N's self-preferencing practices to be lawful. The content of the case is as follows: Company N, which holds a dominant position in the search service market and online price-comparison shopping market, artificially adjusted its search algorithms to display products from its own open market at the top of search results.
This is a classic case of self-preferencing. Self-preferencing refers to an act in which an online platform operator treats its own products or services more favorably than those of competing businesses on its platform. By prioritizing its own open market products in search results, Company N treated its own products and services favorably.
There is a perspective that because self-preferencing can be used as a means to reinforce market dominance across multiple markets, it should be actively regulated. The argument is that it is unreasonable for an operator to treat its own products or services more favorably on a platform it created, as it is akin to the referee playing as a player. Reflecting this view, the Korea Fair Trade Commission (KFTC) defines the potential for restricting competition due to self-preferencing in related notifications as follows:
· Self-preferencing can leverage influence in the online platform market to extend dominance into related markets based on the characteristics of existing and related markets and transaction details, thereby hindering competition in those related markets.
· If an online platform operator's dominance in related markets is reinforced, this can act in a way that maintains and strengthens its dominance in the original online platform market, thereby solidifying its monopoly or oligopoly status.
In January 2021, the KFTC determined that Company N used its overwhelming position in the search and comparison shopping markets to discriminate against the transaction terms of merchants on its open market—with whom it had no direct contractual relationship but a substantial trading relationship—and as a result, excluded competitors from the open market. Based on this judgment, the KFTC imposed sanctions, finding that Company N violated the Fair Trade Act by engaging in abuse of market-dominant position, specifically: △interfering with business activities and discriminatory treatment, and △inducing customers through other deceptive methods.
However, in the ruling 2023Du32709 delivered on October 16, 2025, the Supreme Court remanded the case, effectively stating that the KFTC's decision was flawed. The ruling determined that self-preferencing is not illegal in principle. In other words, it ruled that 'there is no legal basis to require Company N to treat products or services offered by other companies equally to its own when setting transaction conditions, merely because it is a market-dominant online platform operator.'
Furthermore, the Supreme Court held that in order to view Company N's search algorithm adjustment as unfair, two conditions must be met: ① competition-restricting effects must occur, and ② the intent to restrict competition must be recognized. It concluded that neither was proven for the following reasons: First, during the period when Company N's search algorithm was adjusted, the transaction volume and the number of merchants on competing open markets continued to grow, and effective competition remained as new players entered the market; thus, competition-restricting effects were difficult to recognize.
Second, algorithm adjustment falls under Company N's normal business activities. Such efforts themselves cannot be recognized as having the intent or purpose of restricting competition. Rather, it could be seen as a desirable act of performance-based competition. Moreover, search algorithms are changed dozens of times, and one cannot selectively pick a few to label as problematic, as some bias may appear during the algorithm improvement process.
Opinions on this ruling are sharply divided. Those in favor argue that the ruling clearly determined there is no legal basis for regulating self-preferencing and recognized algorithm adjustment as a normal business activity, which will serve as an opportunity to expand innovation and competitive potential for online platform operators.
Those against the ruling argue that declaring self-preferencing legal is inconsistent with global regulatory trends. They also believe that requiring strict proof of competition-restricting effects is equivalent to waiting for the results of abuse of a dominant market position to manifest before regulating, effectively abandoning ex-ante regulation of platform operator dominance abuse.
Regarding the conclusion that algorithm adjustment is a legitimate business activity, they argue that since merchants are highly dependent on traffic, search ranking is not a matter of simple exposure, but one directly linked to sales and survival; thus, algorithm manipulation can infringe on consumer choice and restrict competition.
Ultimately, this ruling did not end the controversy but rather served as a trigger for new discussions on the standards and direction of self-preferencing regulations. The court appears to have taken a relatively cautious stance based on the interpretability within the current legal system. If such debates continue, the direction of regulation in this area is more likely to be determined by legislative intervention rather than judicial judgment in the future. Furthermore, the path of online platform regulation will remain a significant issue in public opinion formation and policy implementation processes.