The South Korean government’s plan to introduce antimonopoly regulations targeting major domestic and global online platforms faces growing uncertainty following Donald Trump’s inauguration on Monday for his second term as US president. Concerns are mounting that Seoul’s proposed measures could lead to trade conflicts with Washington.
Korea's antitrust watchdog and the National Assembly are pushing for a new act, the "Platform Competition Promotion Act," aimed at curbing monopolistic practices by platform operators and encouraging more competition. Not just domestic players like Naver and Kakao, but also US tech giants such as Google and Meta are subject to the new measures, including heightened regulatory scrutiny.
The Fair Trade Commission has outlined criteria for identifying potential regulatory targets: a single firm holding over 60 percent market share and at least 10 million users in Korea, or a combined market share of 85 percent among three or fewer firms, each with at least 20 million users.
However, uncertainties have emerged following Trump’s return to the White House as the measures could clash with his “America First” policy.
Jamieson Greer, Trump’s nominee for US Trade Representative, already expressed concerns in a recent statement, claiming in a Jan. 24, 2024 Barron's commentary that Korea’s regulatory approach "discriminates" against US companies and could threaten US-Korea trade relations.
If the proposed legislation passes the National Assembly and sanctions against US firms are enforced, Washington might retaliate with trade measures, industry watchers say.
US Congress Republican Rep. Carol Miller introduced the Republic of Korea Digital Trade Enforcement Act in September. The act proposes retaliatory tariffs should Korea impose regulations on American digital businesses.
Under the Trump administration in 2019, the US threatened up to 100 percent tariffs on 63 French products, including wine, after France enacted a digital tax targeting US companies like Google and Meta.
According to the Financial Times, the European Commission is reportedly reviewing cases under its Digital Markets Act, implemented in March, potentially narrowing the scope of investigations to avoid another retaliation case.
“If the new regulations apply to US Big Tech, Seoul could face intense trade pressure from Washington. “There is a possibility that reverse discrimination against Korean companies could become a reality, so careful legislation is needed,” said Lee Sung-yeop, a professor at Korea University's Graduate School of Management of Technology.
By Jie Ye-eun (yeeun@heraldcorp.com)
