South Korean FTC Launches Aggressive M&A Review in Digital Markets Amid Crucial Dunamu Deal

SEOUL, South Korea – February 2025: In a decisive move that signals a new era of regulatory scrutiny, South Korea’s Fair Trade Commission (FTC) has pledged to actively review mergers and acquisitions within the nation’s burgeoning digital markets. This pivotal announcement, made directly to the National Assembly’s National Policy Committee, comes at a critical juncture as the regulator examines the proposed acquisition of Dunamu, the powerhouse operator behind the Upbit cryptocurrency exchange, by financial giant Naver Financial. Consequently, this policy shift underscores a global trend of authorities grappling with the concentration of power in fast-evolving tech sectors.

South Korean FTC Intensifies Scrutiny of Digital Market M&A

The South Korean FTC delivered its formal report on February 23, outlining a proactive strategy to investigate and correct fundamental anti-competitive practices. The commission explicitly targets innovative industries, including big tech and digital asset platforms. Therefore, the regulator aims to prevent the entrenchment of monopolies that could stifle competition and harm consumers. This approach represents a significant evolution from reactive enforcement to preventative oversight. Moreover, the policy directly addresses growing public and legislative concerns over market dominance by a handful of large conglomerates, known as chaebols, in the digital sphere.

Historically, South Korea has fostered rapid technological growth, often with a lighter regulatory touch. However, the global landscape has shifted dramatically. For instance, regulators in the European Union and the United States have recently intensified their examinations of tech mergers. The South Korean FTC’s new stance aligns with this international regulatory convergence. The commission now recognizes that traditional merger review frameworks, designed for industrial economies, may not adequately capture the network effects and data advantages inherent in digital platforms. Subsequently, this necessitates a more nuanced and forward-looking analysis.

The Catalytic Dunamu and Naver Financial Deal

The FTC’s announcement carries immediate practical weight due to its ongoing review of a specific, high-profile transaction. Naver Financial, the fintech arm of the internet conglomerate Naver Corporation, has proposed acquiring a significant stake in Dunamu. Significantly, Dunamu’s Upbit is South Korea’s largest cryptocurrency exchange by trading volume, commanding a dominant market position. This potential union between a leading internet service provider and the top crypto exchange creates a powerful digital finance ecosystem.

A merger of this scale triggers several key antitrust considerations for the South Korean FTC:

• Market Concentration: The deal could substantially increase concentration in the digital asset exchange market, potentially reducing consumer choice and innovation.
• Data Consolidation: Combining Naver’s vast user data with Dunamu’s financial transaction data raises significant privacy and competition concerns.
• Ecosystem Lock-in: The integrated services could create barriers for rivals, making it difficult for competing exchanges or fintech apps to attract users.

The table below outlines the core entities involved and their market positions:

Expert Analysis on the Regulatory Shift

Legal and financial experts view the FTC’s stance as a necessary adaptation. Professor Kim Jae-hyun, a competition law specialist at Seoul National University, notes, “The FTC is correctly identifying that competition in digital markets isn’t just about price. It’s about access to data, interoperability, and future innovation. A narrow review focused solely on current market shares would miss the fundamental risks.” This expert perspective highlights the depth of analysis now required. Furthermore, the move may encourage more startups, knowing that their potential acquisition by a giant will face rigorous scrutiny, potentially preserving a more dynamic market.

The timing is also crucial. South Korea’s Virtual Asset User Protection Act, which came into full effect in 2024, established a comprehensive legal framework for crypto assets. The FTC’s active M&A review complements this by addressing the market structure in which these protected assets are traded. Together, these policies form a dual-pronged approach: one set of rules protects individuals from fraud and operational risk, while another safeguards the competitive integrity of the marketplace itself.

Broader Impacts on Fintech and Big Tech Innovation

This regulatory pivot will undoubtedly influence corporate strategy across South Korea’s tech sector. Companies planning acquisitions in artificial intelligence, blockchain, cloud services, and digital payments must now prepare for longer, more substantive reviews. The FTC has signaled it will examine not just the immediate effects of a deal, but its potential to foreclose competition in adjacent or future markets. For example, a merger might be approved only with binding behavioral remedies, such as data-sharing mandates or interoperability requirements.

Internationally, this positions South Korea alongside other jurisdictions taking a hard line on tech consolidation. The European Commission’s enforcement of the Digital Markets Act (DMA) and the U.S. Federal Trade Commission’s renewed focus on digital competition create a coordinated, albeit informal, global front. Consequently, multinational tech firms must navigate an increasingly complex and stringent web of merger control regimes. For South Korean companies with global ambitions, this domestic experience may better prepare them for overseas regulatory hurdles.

Conclusion

The South Korean FTC’s commitment to actively review mergers and acquisitions in digital markets marks a watershed moment for the country’s regulatory landscape. Prompted by the concrete case of the Dunamu acquisition, this policy shift aims to prevent anti-competitive monopolies in innovative sectors like cryptocurrency and big tech. By adopting a proactive, effects-based analysis framework, the commission seeks to balance the drive for innovation with the imperative of maintaining fair and open markets. Ultimately, the success of this approach will be measured by its ability to foster a dynamic digital economy where new entrants can challenge incumbents, ensuring long-term benefits for South Korean consumers and the integrity of its digital markets.

FAQs

Q1: What did the South Korean FTC announce?
The South Korean Fair Trade Commission announced it will actively review mergers and acquisitions in innovative digital industries, including big tech and crypto platforms, to prevent monopolistic practices. This statement was part of a formal report to the National Assembly.

Q2: Why is the Dunamu deal significant in this context?
The proposed acquisition of Dunamu (operator of Upbit) by Naver Financial is a live case currently under FTC review. It tests the commission’s new, stricter approach to evaluating market concentration and anti-competitive risks in the digital asset sector.

Q3: How does this change South Korea’s previous regulatory stance?
It represents a shift from a more passive, reactive enforcement model to a proactive, preventative oversight strategy. The FTC will now more deeply analyze how digital market M&A could harm future competition, not just current market conditions.

Q4: What are the potential outcomes for the Naver-Dunamu deal?
The FTC could approve the deal unconditionally, approve it with conditions (remedies), or block it entirely. Conditions might include data access rules or limits on integrating services to protect competitors.

Q5: Does this affect only cryptocurrency companies?
No. While the Dunamu case is a catalyst, the FTC’s policy applies broadly to “innovative industries” and “digital markets.” This includes big tech, fintech, AI, and other platform-based businesses where network effects can lead to rapid market dominance.