A single company controls more than 70% of the software systems used to calculate and account for management fees in South Korea's apartment complexes, a market worth more than 33 trillion won ($23 billion) a year. The firm also holds a near-monopoly share of the electronic payment network linking those fees to banks and credit card companies, prompting calls for the Fair Trade Commission to examine competition in the sector.
Rep. Son Myung-soo of the Democratic Party of Korea, a member of the National Assembly's National Policy Committee, said on the 25th that an analysis of data from the Ministry of Land, Infrastructure and Transport's apartment management information system, known as K-apt, showed that management fees billed at multi-unit housing complexes nationwide totaled 33.0644 trillion won last year. That works out to about 2.75 trillion won a month.
In the market for enterprise resource planning systems that handle fee calculation and accounting, Company A held a 68.2% share by number of complexes and 71.4% by number of households as of September this year. The second-ranked provider accounted for just 11.5% of households.
Reliance on Company A was also high in the market for electronic bill presentment and payment of management fees. According to data obtained by Son's office, Company A accounted for between 99.7% and 100% of management fee payments at the four banks and six card companies whose partner providers could be identified. Payments processed through Company A at those financial firms last year exceeded 11.47 trillion won in total, including 2.512 trillion won at banks and 8.9615 trillion won on credit cards.
Son said the heavy concentration in both the software and payment markets could make it harder for new entrants to compete and limit the choices available to residents. "Apartment management fees are a market closely tied to daily life, with 33 trillion won changing hands every year," he said. "The Fair Trade Commission must closely examine whether this amounts to a de facto monopoly and ensure that a fair market environment is established."