The Korea Fair Trade Commission (KFTC) is expected to announce its decision as early as October regarding possible sanctions against YouTube (Google) for its alleged bundling practices (YouTube Premium bundling YouTube Music), a move that has garnered significant attention from the music industry.
Concerns are growing that without strong sanctions against YouTube Music—now the top music streaming service in Korea, having surpassed the domestic music site Melon in monthly active users (MAU) last December—or if the decision is delayed, the survival of domestic streaming platforms could be at serious risk.
According to industry sources on September 12, the KFTC has completed its investigation into allegations that Google leveraged its market dominance to push its products through bundling. The commission has sent a review report, including its preliminary decision, to Google. This comes 17 months after its first on-site investigation of Google Korea in February 2022.
Once Google submits its defense, the KFTC will schedule a full committee meeting to decide on the sanctions. However, the timeline could be extended if Google requests more time to prepare.
Google currently offers YouTube Premium (14,900 KRW/ 11.21 USD per month), which allows ad-free video viewing on YouTube, along with free access to its music streaming service, YouTube Music. Notably, a more affordable "YouTube Premium Lite" plan, which removes ads but does not include the music streaming service, is not available in Korea.
Bundling refers to a practice where a dominant company ties the sale of a secondary product to its primary product. When such practices involve market dominance, separate product functionalities, forced purchases, and restrictions on competition, they can be deemed unfair trade practices, subject to sanctions by the KFTC.
The KFTC suspects that Google has used its dominance in the video streaming market to block new competition in the music streaming sector, restricting fair competition by forcing users to adopt its music service.
According to Mobile Index data from platform company IGAWorks, YouTube Music—initially a latecomer behind Melon (Kakao Entertainment) and Genie Music (KT)—surpassed Melon in MAUs for the first time last December, claiming the top spot in the industry. As of August 2024, YouTube Music's MAU stands at 7.43 million.
During the same period, Melon’s MAU dropped sharply from 8.7 million to around 7 million, while Genie Music’s MAU almost halved, plummeting from 5.06 million to 2.9 million. Other domestic platforms, including FLO (SK Telecom), VIBE (NAVER), and Bugs, have also seen their user numbers decline, indicating that YouTube has successfully drawn users away from domestic services.
From the consumer’s perspective, subscribing to YouTube Premium grants free access to YouTube Music, reducing the need to pay for additional services like Melon, Genie Music, or FLO.
Korean netizens commented:
"If YouTube music is gone, I'll use Apple."
"Then they should lower the price for Melon, Genie, etc."
"What are they trying to protect? The other music sites just fell behind on competition."
"That's so low."
"What are they saying? Is this some kind of communism?"
"They should think about improving themselves in competition instead of placing sanctions."
"That doesn't mean people would start using Melon or Genie, they would start using Apple Music."
"Are they crazy?"
"I am just going to go use Apple Music."
"Lower the price Melon, and also take care of the chart manipulation!"
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