Kakao, Naver Plunge After Korea Lawmakers Attack Internet Giants

(Bloomberg) — Kakao Corp. and Naver Corp. plummeted their most in more than a year after prominent South Korean lawmakers warned internet giants against pursuing profits and abusing their market dominance.

Kakao should not follow in the path of the chaebol, the country’s sprawling conglomerates, in ignoring fair competition in the pursuit of wealth, ruling Democratic Party chief Song Young-gil told a forum hosted by fellow lawmakers, according to Yonhap. Other lawmakers at the forum — entitled “Expansion of Dinosaur Kakao: Discussion on Countermeasures to Eliminate Unfair Trade by Platform Conglomerates” — said they were concerned about moves by Kakao including “abuse of position and attempting to raise service prices.”

The comments spurred fears that lawmakers may seek to push policies to rein in their influence. Kakao, which runs Korea’s biggest messaging and social media services, plunged more than 11% — its biggest decline since 2012. Naver, which runs the messaging platform Line as well as a host of apps, slid 8%, its biggest intraday loss in over a year. The stocks were among the worst performers on the benchmark Kospi index.

Lawmakers have slammed the massive tech and industrial complexes like Samsung Electronics Co. that dominate Korea’s economy for monopolistic behavior and corruption. But the latest criticisms marked one of the strongest critiques of the country’s fast-expanding internet sector, which in recent years has encroached on the market share of the decades-old chaebol.

Read more: Kakao Pay Cuts IPO to $1.3 Billion As Valuation Concerns Grow

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