The Fair Trade Commission(FTC) conditionally approved a joint venture between Gmarket, a South Korean e-commerce firm, and AliExpress, a Chinese competitor, but banned the two from shipping Korean consumers' data to Beijing.

The FTC said Thursday that the measure aims to prevent excessive market concentration while safeguarding consumer privacy and encouraging Korean sellers to expand into overseas markets.

The authority mandated that the two companies, which will be incorporated as subsidiaries of the joint venture called Grand Opus Holding, must operate independently and keep consumer data separated within the cross-border shopping market, though the sharing of certain information may be allowed with user consent within countries.

The watchdog warned that combining Gmarket’s 50 million-plus user database with AliExpress’ global purchase and rating data could amplify network effects and give the joint venture a dominant position with a combined market share of 41 percent.

The conditions will remain in place for three years, with the companies required to report their compliance to the FTC through an oversight panel that includes IT experts.

This marks the first time the FTC has imposed conditions on a merger to counter the competitive risks of data consolidation.