South Korea’s antitrust watchdog to rule on YouTube bundling allegation

A picture taken on October 5, 2021 in Toulouse shows the logo of Youtube social media displayed by a by a tablet and a smartphone. (Photo by Lionel BONAVENTURE / AFP)

South Korea’s antitrust regulator plans to wrap up its over 16-month investigation into YouTube next month to determine whether the US platform breached any rules by bundling its music streaming service with its ad-free premium subscription program.

Korea Fair Trade Commission Chairman Han Ki-jeong said the antitrust agency is “well aware that the industry and customers raised concerns over the bundling of YouTube Music with the YouTube Premium subscription,” during a press conference held on Friday.

READ: YouTube’s ever-growing role in South Korean politics

The FTC is investigating whether the bundling of YouTube’s services has unfairly hindered the business of other music streamers, restricting competition in the Korean market.

“(The FTC) will complete its investigation in July and take strict measures if (YouTube) is found to have broken laws,” Han said.

In February last year, the FTC began an on-site probe into Google Korea regarding the allegation tied to YouTube Music. However, the investigation has not concluded for over 16 months.

The FTC is also investigating whether YouTube has abused its market dominance to gain a share in the local music streaming market.

If YouTube is found to have breached laws here, the US company could face fines of up to 6 percent of its sales.

Over the past few years, YouTube Music has been provided to YouTube Premium subscribers here without additional charges. This bundling helped YouTube attract many subscribers in a short period of time.

According to a local market research company, the number of monthly active users of YouTube Music more than doubled from 3.3 million as of March 2021 to 7.4 million in December 2023. The figure for the country’s leading music streaming platform, Melon, declined from 8.7 million to 7.3 million during the same period.

Meanwhile, the FTC chief added the commission will also complete its investigation of Chinese e-commerce platforms’ unfair business practices.

Previously, the FTC started its investigation into AliExpress and Temu on suspicions they had allegedly violated Korea’s e-commerce acts and advertisement regulations by making false and exaggerated advertisements.

In terms of the recent 140 billion won ($102 million) fine imposed on Coupang for manipulating search rankings and employing staff to write reviews to promote its private label products, the FTC chief said that its decision was made to “encourage competition in the online shopping platform market and to establish order within the market.”