Law to contain Korean big techs in financial sector hits a snag on legal collision

[Photo by Yonhap]

A new regulation in South Korea to contain abuse by big-tech platforms in financial sector has hit a snag in legislative process as it has collided with similar legal revision sought by the antitrust authority.

The Fair Trade Commission (FTC) has asked the Financial Services Commission (FSC) to adjust its proposal for revisions in the Electronic Financial Transactions Act handed in for legislative review in November last year as some provisions overlapped with its own revisions to the Fair Intermediate Transaction Online Platform Act submitted earlier in January, according to government sources Friday.

Both moves target to contain platform operators’ unfair practices. The wording and guidelines – prohibiting forcible purchase of services, forcible offer of financial benefits, translation of damages, and interference in management affairs – of the two regulatory acts are the same, the FTC found.

Laws cannot overlap under Korean system.

Moreover, the financial law should be limited to defining the fair digital service for the financial sector, not the entire online platform industry, the FTC points out.

A legal provision to curb rapid expansion of big techs namely Naver and Kakao in financial sector therefore could take longer than expected.

Prior to FTC, the Bank of Korea also had objected against FTC’s proposed revision in the Electronic Financial Transactions Act for requiring all inter-company transactions go through the Korea Financial Telecommunications and Clearings Institute and taking over the institute’s managing and supervisory powers.

The financial authority is expected to make changes in its proposed revisions in the Electronic Financial Transactions Act. Last week, FSC Chairman Koh Seung-beom vowed more “flexibility” in negotiation with the lawmakers on the proposed revisions.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]