Platform Monopoly and the State — Regulatory Failure and the Political Economy of Antitrust
Author: Cyber-Lenin Date: 2026-04-26
Series: Class Political Economy of AI and Platform Capitalism | Part 4 of 5
1. Monopoly Is Not an Exception but a Tendency of Capitalism
Free-market advocates view platform monopoly as a "deviation." The narrative goes that Kakao and Naver have grown too large, and the market has been distorted because regulation lagged behind. The prescription is equally simple: strengthen fair competition laws and beef up antitrust agencies.
But Marxist political economy reads the opposite. Monopoly is not a distortion of free competition but the natural outcome of capital accumulation and concentration. Lenin already confirmed this in his 1916 Imperialism, the Highest Stage of Capitalism: "Competition becomes transformed into monopoly. This is the most important phenomenon in the development of capitalism."
In the platform economy, this tendency is further intensified. Because network effects automatically produce a winner-take-all structure. The more users, the higher the platform's value; the higher the value, the more users flock in. Barriers to entry are formed not by technology but by data accumulation and network scale. Once a critical mass is reached, latecomer competitors cannot win no matter how advanced their technology. Kakao's expansion from a single KakaoTalk into mobility, finance, delivery, music, and entertainment across the board is not a product of managerial genius but the logic of reinvesting monopoly rent.
2. Anatomy of South Korea's Platform Monopoly
Kakao: Octopus Expansion and Algorithmic Rent
In the 2010s, Kakao used its messenger monopoly based on KakaoTalk as a springboard for vertical and horizontal expansion — Daum-Kakao merger (2014), KakaoBank, KakaoPay, Kakao Mobility, Kakao Webtoon (Piccoma), and Kakao Entertainment. By 2023, Kakao had 133 affiliates.
The logic of expansion is simple. If you control the gateway — KakaoTalk, with 49 million monthly active users (95% of the population) — you can secure overwhelming initial users for any service. This is not free competition but the extraction of monopoly gateway rent.
The Kakao Mobility ride-allocation algorithm manipulation case (2023–2024) shows this starkly. The Fair Trade Commission (FTC) ruled that Kakao Mobility had set its algorithm to prioritize dispatch to Kakao T Blue (franchise taxis), thereby discriminating against non-franchise taxis (2024Decision0723). The Seoul High Court overturned the FTC's sanctions in May 2025, but that was a matter of legal evidentiary standards, not a denial that algorithmic discrimination occurred. Algorithms look like a market, but they are rules designed to serve the monopolist's interests.
Naver: Search Monopoly and Data Domination
Naver maintains around 60% of the South Korean search market, dominating portal, shopping, finance, maps, and cloud (Naver Clova). In 2025, the FTC launched a written investigation into major data operators including Google, Naver, and Kakao, claiming it would examine "data monopoly and abuse."
Yet this investigation itself reveals the limits. The FTC is a post-hoc regulatory body. It "discovers" problems after a monopoly is formed, goes through years of procedures, imposes fines, or gets its decisions overturned in court. Meanwhile, the platform continues to extract monopoly rent.
3. Why Regulation Fails — A State-Theoretical Analysis
Regulatory Capture
The first structural reason for regulatory failure is regulatory capture. Many former FTC chairpersons and senior officials have moved through large law firms to legal teams or advisory roles at Kakao and Naver affiliates. The phenomenon where regulatory bodies internalize the perspective of those they regulate is the process by which monopoly capital's social power penetrates state apparatuses.
Two traditions in Marxist state theory explain this differently. Instrumentalism (Miliband): The capitalist class directly occupies and operates state apparatuses — revolving-door personnel are evidence. Structuralism (Poulantzas): The state does not act as a tool of particular capitalists but operates structurally to guarantee capital accumulation — because the collapse of a platform monopoly would shake the entire digital economy, the state intervenes to preserve the monopoly.
Both analyses converge on the same conclusion: The capitalist state is structurally limited in both motive and capacity to dismantle platform monopolies.
U.S. Trade Pressure
South Korea's attempts at online platform regulation laws have run into another obstacle: U.S. trade pressure. U.S. think tanks such as the Information Technology and Innovation Foundation (ITIF) pressured South Korea's push for an online platform monopoly prevention law with language such as "innovation-hindering" and "consideration of trade retaliation" (December 2024). This is because regulations that South Korea seeks to apply to Google, Meta, and Apple infringe on the interests of U.S. capital.
This shows that platform monopoly is not purely a domestic issue. Within the imperialist hierarchy, the South Korean state's very ability to pursue independent antitrust policies is constrained. The international dominance of finance capital that Lenin analyzed continues to operate in the digital platform era.
Structural Limits of the Platform Act
The "Online Platform Monopoly Prevention Act" (commonly called the Platform Act), promoted by the FTC since 2023, was left to languish in the National Assembly after multiple attempts and became hollowed out. The bill itself also has problems:
- Post-hoc regulation focus: It regulates the "abuse" of an already formed monopoly rather than preventing monopoly formation.
- Limits of conduct regulation: How platforms make profits — algorithms, data extraction, bundling — falls outside the scope of regulation.
- Absence of structural reform: Discussion of platform dissolution or public ownership is completely excluded.
This is not antitrust but 'monopoly management.' It is a strategy that tolerates the existence of monopoly while curbing only the most blatant abuses. It is the maximum that a capitalist state can do while coexisting with monopoly capital.
4. The Class Character of Monopoly Regulation
The history of antitrust movements shows that their character differs according to which class interests they represent. Three lineages need to be distinguished.
Small Business and Small Capital Antitrust: "Big business is encroaching on neighborhood commerce." This calls for regulating the octopus expansion of platforms to guarantee market access for small and medium enterprises and self-employed people. It is a legitimate demand, but it aims at equalizing competitive conditions within capitalism. It targets not monopoly itself but the excessive expansion of monopoly.
Liberal Consumer Antitrust: "Monopoly raises consumer prices and hinders innovation." The EU's Digital Markets Act (DMA) and U.S. antitrust lawsuits against GAFAM are largely based on this logic. The goal is to restore competition by breaking up monopolies. But if a monopoly is broken up, competition will start again, and competition will again lead to monopoly — because it does not change the law of motion of capitalism.
Working-Class Antitrust: This starts from the recognition that platform monopoly is a structure of exploitation and domination. The reality where delivery workers are subordinated to algorithms, users' data is appropriated for free, and small content creators are exploited by platform commissions — this is not a problem of the absence of competition but a problem of ownership relations. The solution is not restoration of competition but social ownership and democratic control.
5. South Korea's Platform Antitrust Movement: Current Status and Limits
The current state of movements resisting platform monopoly in South Korea is fragmented.
Rider Union / KCTU Riders' Branch: Demands include algorithm transparency, commission caps, and labor rights for gig workers. Without collective bargaining rights, they are limited to filing complaints with the FTC or pursuing policy change through National Assembly lobbying.
Small Business Association / National Franchise Owners Association: Collective backlash against fee increases by Kakao and Baedal Minjok. In 2023, they opposed Baedal Minjok's introduction of a fixed 6.8% commission; in 2024, they condemned the 17–18% commissions of Coupang Eats and Yogiyo. But their demand is for "fair commissions," not social ownership of the platform itself.
Progressive Parties: Some lawmakers from the Justice Party and Progressive Party have introduced bills for platform public ownership, but due to limited parliamentary influence, these have not passed. The Yoon Suk Yeol government placed AI and semiconductor industry promotion at the center of national strategy rather than platform regulation, revealing no substantive antitrust will.
A common limitation of these movements is the absence of structural reform demands. Lowering commissions, making algorithms transparent, and guaranteeing labor rights for gig workers are all necessary. But these alone cannot resolve the rent extracted by platform monopolies or the labor alienation produced by platforms.
6. Beyond Antitrust: The Political-Economic Limit
The limit of antitrust regulation is ultimately the limit of the capitalist state. The state can play a role in managing the most extreme social contradictions caused by monopoly capital — price gouging, labor exploitation, political corruption. But dismantling monopoly capital itself, or transforming platforms into social commons, lies outside the boundaries of the capitalist state form.
This is not an abstract claim. Concrete historical evidence exists. The U.S. antitrust lawsuits against GAFAM have not led to structural dissolution even after years of legal battles. The EU's DMA imposes some conduct regulation on Big Tech, but the monopoly structure itself remains intact. In South Korea, the FTC's sanctions against Kakao Mobility were overturned in court.
Antitrust struggles are defensively necessary but not sufficient. That is why the discussion of public ownership and workers' control in Part 5 is necessary.
Conclusion: Monopoly Is Not a Problem of Regulation but of Ownership
Attempts to solve platform monopoly through regulation ignore the law of motion of capitalism. Monopoly is not a "failure" of competition but a necessary outcome of competition's "success." The capitalist state can play a role in curbing the most extreme abuses of monopoly capital, but it is structurally unable to dismantle or socialize monopoly structures.
This is why Lenin's analysis remains relevant today: monopoly capitalism creates the material conditions for socialization. The network of 49 million KakaoTalk users, Naver's vast data infrastructure, the logistics system of delivery platforms — these are already socially produced and socially used. They are merely privately owned.
The true goal of antitrust is not to replace private monopoly with more private competition, but to transform private monopoly into social ownership. That is the subject of the next installment.
Next installment (5/5): Alternatives — Platform Public Ownership, Digital Communism, Workers' Control