South Korea’s Fair Trade Commission has begun reviewing a business combination between Naver Financial and Dunamu. It is examining potential limits on competition not only in existing markets such as digital asset exchanges and simple payments, search and shopping, but also in a won stablecoin market that has not yet formed.

The commission’s secretariat said on Monday it had received remedies from Naver Financial and Dunamu to address competition concerns and submitted an examiner’s report to the commission. The submission means the merger review process has started.

Naver Financial and Dunamu reported the business combination to the commission in November last year through a comprehensive share swap. Under the structure, Naver Financial acquires all Dunamu shares and provides Dunamu shareholders about 2.54 Naver Financial shares per Dunamu share.

Once the business combination is completed, Naver Financial becomes Dunamu’s wholly owning parent and Dunamu becomes Naver Financial’s wholly owned unit.

The commission’s examiner defined 10 relevant markets affected by the combination.

They include domestic online simple payments and digital asset exchanges, online search portals, online advertising, online shopping, financial MyData, brokerage trading for unlisted shares, listed stock investment platforms and online secondhand trading markets.

It also included the domestic won stablecoin issuance market, which the two companies plan to enter in the future, as a relevant market.

Jeon Seong-bok (전성복), director general of the commission’s Corporate Transactions and Mergers Review Bureau, said, "I do not recall ever judging competition restriction concerns in an unformed market." He said it considered factors including the introduction of bills related to won stablecoins and that the two companies are focusing on entering the market.

The commission judged that the combination would generate 12 horizontal, vertical and conglomerate overlaps.

It classified the domestic listed stock investment platform and online secondhand trading platform, in which both companies currently participate, as horizontal overlaps but placed them in a "safe zone" with low competition concerns.

The commission, however, judged there were competition concerns for six conglomerate overlaps combining Dunamu’s digital asset exchange business with Naver affiliates’ businesses in simple payments, search portals, online advertising, online shopping, financial MyData and brokerage trading for unlisted shares.

It raised in particular the possibility of competition restrictions in the won stablecoin market.

The commission said it expected two vertical overlaps between won stablecoin issuance and digital asset exchanges and online simple payments, and two conglomerate overlaps between stablecoin issuance and simple payments and online shopping.

The commission’s examiner judged all four of those stablecoin-related overlaps could potentially restrict competition.

The review also covers whether combining Naver’s search, shopping and payment data with Dunamu’s digital asset trading data could allow more detailed identification of users’ investment preferences and serve as an entry barrier for other operators.

It was also reported that the review looked at the possibility that if the two companies directly issue a won stablecoin, they could lower transaction fees for the coin or restrict its use on rival exchanges.

The commission notified the companies of its preliminary findings for markets where it sees competition concerns, and Naver Financial and Dunamu submitted remedies to address them. The submission reflected the examiner’s requests for revision and supplementation.

At a full commission meeting, it will decide whether to approve the business combination and set specific conditions based on the remedies. Remedial measures could be strengthened or eased during the review process, and the combination could be blocked if the commission judges competition concerns have not been resolved.

A commission official said of the possibility of reaching a conclusion within the year, "The chair is also aiming to complete the review within the year."