「 Exclusive Dealing by a Real Estate Advertiser through the Internet 」 By Jang Duck Jin Korea Fair Trade Commission

Definition Exclusive Dealing : A trader deals with an another unreasonably under the condition of not dealing with the trader's competitors Exclusive Dealing : A trader deals with an another unreasonably under the condition of not dealing with the trader's competitors A transacting partner Trader (oneself) Competitors

Standard of Illegality Restraint on Competition Restraint on Competition ＊ Less then 10% of a trader's market share → Exempt from an inspection ◦ Possibility of securing substitute suppliers and distribution channels by competitors - Unrestraint on competition once they secure easily - Unrestraint on competition once they secure easily ◦ Trader's market share and its ranking in the industry ◦ Trader's market share and its ranking in the industry - High restraint on competition as the market share and the ranking increase - High restraint on competition as the market share and the ranking increase

Standard of Illegality ◦ Numbers and Market Share of other exclusively dealing partners ◦ Numbers and Market Share of other exclusively dealing partners - High restraint on competition as the number and market share of other partners increase - High restraint on competition as the number and market share of other partners increase ◦ Intention and Objective of Exclusive Dealing - A trader's intention to enter a new market: Low restraint on competition - A trader's intention to enter a new market: Low restraint on competition

Case Study Outline of the case Outline of the case No.1 Internet Portal (Naver) Internet real estate advertiser (Company A) Competitor (Company B)

Case Study Market Status Market Status [Market status of internet real estate advertisement] ◦ Internet Portal Site - Internet portal sites (eg: Naver, Daum, Yahoo etc.) operate real estate sections - With an advantage of comparing various real estate information, many internet users use portal sites. In this regards, many internet real estate advertisers have high desire to deal with a portal site - Status of Internet Portal Site: Naver Real Estate 66%, Daum Real Estate 15%, Yahoo Real Estate 16%

Case Study ◦ Internet real estate advertisers - Conclude a contract with a real estate agent and advertise the agent’s offerings (for sale) in their own site or portal sites - In case of the advertisement in their own site, company A and B ranked second and first respectively

◦ Transaction chart of real estate advertisements through the Internet Case Study Real estate agent Internet real estate advertisers Internet real estate advertiser's own site Consumer Portal site Sign a Membership Provide offering information after concluding a tie-up agreement Search real estate information Search real estate information

Case Study Illegality of Company A Illegality of Company A ◦ Illegal act of company A - Company A, the internet real estate advertiser has concluded an ‘offering' tie-up agreement with Naver, the No. 1 Internet portal site under the condition of not dealing with a company B who is A's competitor ◦ Reasons for illegal judgment - Company B could not find a substitute distribution channel which can replace Naver's Real Estate section (66% of market share)

Case Study - Company B is in a disadvantageous position because when a real estate agent chooses an internet advertiser, it considers which portal site the advertiser deals with, the most important element - Exclusive dealing by company A who is not a new enterer but ranks second in the industry in order to exclude No. 1 company A can bring high restraint on competition □ Corrective Measure ◦ Ordered to amend or delete articles related to exclusive dealings among concluded contracts between company A and the portal site, Naver

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