Naver and Toss are taking their conflict to the National Assembly. The two companies are at odds over issues related to reward-based advertising and their partnership concerning the sales management system (POS). Key executives from both firms are set to testify at a hearing of the National Assembly's Political Affairs Committee.
According to political and financial sources on October 1, the committee has included Choi Jae-ho, CEO of Toss Place, and Lee Sang-cheol, head of Naver Place, in the list of witnesses to be approved during the day's meeting. It is reported that there is a consensus between the ruling and opposition parties regarding the selection of these witnesses. If the list is confirmed during the full committee meeting, both individuals will appear at the hearing scheduled for October 12.
The two companies have recently clashed over the POS partnership issue. Toss claims that Naver has unjustly excluded its POS system from the partnership. Toss Place, a subsidiary of Toss, is considering filing a complaint with the Fair Trade Commission, alleging that Naver's store management service, 'Place Plus,' has excluded its POS system, 'Toss POS,' without valid reasons.
Launched by Naver in June 2022, Place Plus integrates store POS data with Naver's search and map services to provide information such as popular menu items and peak hours. Toss Place argues that despite Toss POS being a leading player in the industry, it has been excluded from the partnership for an extended period, disadvantaging approximately 150,000 small business owners who use Toss POS in terms of search visibility and reservation and order integration.
On the other hand, Naver has communicated to Toss that it is difficult to pursue further business collaboration while issues regarding Toss's 'reward-based advertising' remain unresolved.
Reward-based advertising compensates users with points or rewards for completing specific tasks, such as searching for certain keywords or checking information. Toss has been operating a service that rewards users with points for searching for specific restaurants or products on Naver and entering related information.
Naver contends that this process has led to a surge in artificial searches aimed at receiving rewards, undermining the reliability of its search algorithms, which are based on search volume and user interest. Naver believes that not partnering with a business that harms its services does not constitute a violation of fair trade laws.
During the National Assembly hearing, inquiries are expected to focus on the legitimacy of Naver's position as a platform operator, the appropriateness of its partnership policies, and whether there is discrimination against small business owners using specific POS systems.
* This article has been translated by AI.
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