Korea falls behind in responding to tech companies’ unfair practices

[Graphics by Song Ji-yoon Yoon Yeon-hae]

Concerns rise as South Korea is seen as being left out from the trend of introducing regulations against unfair practices by global technology companies.

The European Union’s Digital Markets Act (DMA) has come into force this week, giving the European Commission new powers to curb unfair practices by global big tech companies.

Similar laws are anticipated worldwide, solidifying regulatory standards for big tech companies.

Korea, however, is seen as being left out from the trend.

Korea’ Fair Trade Commission had pushed for the introduction of the Platform Competition Promotion Act to address big tech monopolistic issues, but the move has been stalled at the moment.

This is raising concerns that the lack of regulatory standards may create a loophole for foreign companies to continue their unfair practices in Korea, according to sources.

One prominent issue is the response to fake news.

Despite global efforts to combat fake news, the Korean government has been slow to respond, with overseas big tech companies delaying taking relevant action by claiming that content moderation is conducted at their headquarters.

This delay is hindering effective measures to block fake news, as it primarily spreads through social media.

The same goes for obscene materials, particularly on short-form video platforms like TikTok and YouTube Shorts. There are mounting calls to establish a fair platform law to address the easy availability of explicit content featuring exposed body parts on these platforms.

Reverse discrimination is another significant challenge. There are concerns that global big tech companies with headquarters abroad could easily evade regulations, leaving only Korean companies as potential sacrifices.

The issue of foreign preferential treatment is not new.

Internet companies pay network usage fees to telecom companies for excessive internet usage.

Korean companies pay internet companies for network usage but overseas companies argue against additional payments, calling it double billing.

According to the Ministry of Science and ICT, Google LLC accounted for 8.6 percent of total traffic as of the end of 2022, followed by Netflix Inc. at 5.5 percent, Meta Platforms, Inc. at 4.3 percent, Naver Corp. at 1.7 percent, and Kakao Corp. at 1.1 percent.

The Korea Fair Trade Commission has been actively pushing for the Platform Act, which would designate dominant platform operators, prohibit self-preferential treatment, and restrict so-called multi-homing, which prevents platform users from using competing platforms.

The FTC believes that platform companies maintain their monopoly by demanding multi-homing and preferential treatment while dominating associated markets through self-preferential clauses and tie-in sales.

FTC Chairman Han Ki-jeong, in the meantime, emphasized on Thursday the need for swift and effective legislation to regulate the harm caused by platform monopolies.

“We will prepare a reasonable bill by collecting opinions from a wide range of people,” Han said.