Most of the criticism is surrounding Naver’s newly proposed website layout, in which online shopping malls listed as the web portal’s business affiliates receive a significant visual advantage with a button that appears next to their name that is indicative of an affiliation with Npay, Naver’s own payment system. (Image: Naver)
SEOUL, Jul. 11 (Korea Bizwire) — South Korean search engine giant Naver has retracted plans to update its website layout after facing criticism for blatantly favoring its online shopping affiliates, which many called an unethical business practice.
Most of the criticism is surrounding Naver’s newly proposed website layout, in which online shopping malls listed as the web portal’s business affiliates receive a significant visual advantage with a button that appears next to their name that is indicative of an affiliation with Npay, Naver’s own payment system.
The newly proposed but now retracted button, which read ‘Npay 3%”, was supposed to appear next to the name of sponsored online shopping sites under the new site’s design.
Critics say Naver’s blatant support for its sponsored online shopping malls, which already receive prioritization from the search engine and appear on top of the page in the ‘power link’ section, is an abuse of power for the country’s no.1 web portal, and could have a devastating effect on market fairness.
One source who wished to stay anonymous said, “The commercial effect of the 3% icon could have forced other online shopping sites to adopt the Npay system due to the pressure.”
Another industry expert argued it’s unfair for Naver to blatantly favor its business affiliates when almost all websites want to promote themselves on the web portal as affiliates.
“(Naver’s action) means any online shopping website that wishes to promote itself must use Npay, which makes no sense.”
Since Naver’s update plan was revealed, criticism from other payment service providers ensued, with some accusing the IT giant – which accounts for 70 percent of the country’s search engine market – of abusing its powerful platform to steal customers from its rivals.
South Korean search engine giant Naver has retracted plans to update its website layout after facing criticism for blatantly favoring its online shopping affiliates, which many called an unethical business practice. (Image: Yonhap)
Naver was set to go forward with its originally planned website update, until growing criticism saw the IT giant confirm with Yonhap News Agency that it has put on hold the controversial layout update indefinitely after holding an emergency meeting and considering the reaction from the industry.
Since the service was introduced in June 2015, Naver’s aggressive marketing strategy saw the turnover of its payment system Npay during the first quarter of this year more than double compared to the same period last year.
Hyunsu Yim (hyunsu@koreabizwire.com)
