Fair Trade Commission to Establish Online Platform Review Guidelines... Launches 'Law Enforcement Standards Task Force'

[Sejong=Asia Economy Reporter Joo Sang-don] The Korea Fair Trade Commission (KFTC) has decided to establish separate review guidelines for the online platform sector through a 'Public-Private Joint Task Force (TF)'.

On the 25th, the KFTC announced that it has launched a public-private joint TF to prepare separate review guidelines applicable to the online platform sector, aiming to enhance the rigor of handling online platform cases and increase predictability for businesses.

Online platforms are two-sided markets that connect two distinct groups of customers, such as restaurants and orderers, who need each other to complete transactions. Because of this, it is sometimes difficult to apply the current market dominance abuse and unfair review guidelines, which were established with single-sided markets in mind. The market dominance abuse review criteria define market delineation based solely on whether buyers can switch purchases in response to price increases. However, platform operators generally provide platform services 'free of charge' to one side of the two-sided market, the consumers, making market delineation difficult under the current standards.

Furthermore, the KFTC believes that the current review guidelines have limitations in properly identifying and evaluating platform behaviors, as online platforms adopt new forms of competitive strategies such as self-preferencing, blocking multi-homing, and demanding most-favored-nation treatment.

Accordingly, the KFTC is promoting the establishment of separate review guidelines applicable to the platform sector to enhance the speed and rigor of handling online platform cases, increase predictability for businesses, and prevent legal violations.

Earlier, on the 22nd, the KFTC selected discussion topics such as market delineation, market dominance, and competition restriction criteria in the platform sector, along with TF operation plans, during the first (kickoff) meeting held at the Korea Fair Trade Mediation Agency.

The TF is co-chaired by Professor Lee Hwang of Korea University and KFTC Secretary-General Kim Jae-shin, with a total of six external members and KFTC department heads participating. Competition law and economics experts were recommended by the Korean Competition Law Association and the Korean Industrial Organization Association, respectively, and the TF also includes legal practitioners (lawyers) and research fellows from the Korea Development Institute (KDI). The TF plans to hold monthly meetings over the next seven months until November to discuss the selected topics.

The KFTC plans not only to operate the TF this year but also to hold related symposiums and conduct research projects, aiming to establish the 'Online Platform Sector Review Guidelines' by next year based on these efforts. The first symposium, co-hosted with the Competition Law Association, is scheduled to be held at the Sejong Convention Center on the 19th of next month.

A KFTC official stated, "Once the online platform sector review guidelines are established, the speed and rigor of handling online platform cases will improve, and market predictability regarding law enforcement will increase. Furthermore, it will promote innovative competition such as market entry by new platform operators and contribute to establishing a fair trading order among platform operators."

This content was produced with the assistance of AI translation services.