The Fair Trade Commission conditionally approved the executive dual-role corporate merger between OTT (Over-the-Top) service platforms Tving and Wavve. Despite the merger of the two platforms, the Fair Trade Commission imposed corrective measures to freeze subscription fees until the end of next year to prevent substantial subscription fee hikes.
On the 10th, the Fair Trade Commission announced that it had reviewed the corporate merger in the form of dual executive roles between CJ Group's Tving and SK Group's Wavve. It concluded that there were some concerns about competition restrictions in the OTT market and approved the merger on the condition of corrective measures.
This corporate merger is a result of both companies agreeing to appoint the majority of Wavve's board members, including five representatives and one auditor, from Tving and CJ employees. The Fair Trade Commission determined that if this agreement leads to a merger of OTT operations between the two companies, it could result in price increases and a reduction in consumer choice, thereby hindering competition.
The Fair Trade Commission particularly noted that both Tving and Wavve possess a loyal subscriber base and exclusive content, resulting in minimal demand shifts due to price hikes. It also considered the structural change where the number of top four OTT operators would reduce to three, suggesting a significant potential for increased price-setting power due to the difficulty consumers face in switching services, especially for content like live broadcast channels and KBO broadcasts.
Accordingly, the Fair Trade Commission mandated that from today until Dec. 31, 2026, Tving and Wavve must maintain their current subscription plans. If they launch a consolidated OTT service, they are required to offer similar pricing and service conditions to current plans for the same duration. Existing subscribers must be allowed to continue using their current conditions even after the merger, and re-subscription within one month after cancellation should be permitted.
This corrective measure was prepared by utilizing the 'Submission of Corrective Plans for Corporate Merger' system introduced in August last year. Tving and Wavve submitted corrective plans to address concerns over competition restrictions, and the Fair Trade Commission finalized the corrective measure based on expert opinions consultation. This marks the first instance of behavioral measures being imposed using the Submission of Corrective Plans for Corporate Merger system.
The Fair Trade Commission assessed that concerns over content blocking or exclusion of competitors were low. This is due to CJ Group's content not being considered essential for other OTT operators and the existence of multiple alternative suppliers in the outsourced production, distribution rights transaction, and additional film distribution markets. It also deemed that bundled sales with SK Group's telecommunications and IPTV products were not likely to result in excluding competitors.
A Fair Trade Commission official noted, "In the future OTT market, Tving and Wavve are expected to compete fiercely with formidable competitors like Netflix, Coupang Play, and Disney Plus." The official added, "The Fair Trade Commission will continue to monitor the OTT market closely to promote fair and free competition and innovative growth and will strictly enforce the law against any violations."