Financial Authorities Advocating Uniform Regulation for Big Tech "Improving Regulatory Discrimination"

'Post-Corona' Policy Direction Announced
Plan to Improve Regulatory Arbitrage and Fairness Issues
Cautious Stance on Specifics
"Same Function Regulation Not Easy"
"Need to Consider Whether It Benefits Consumers"

[Asia Economy Reporter Kim Hyo-jin] Financial authorities have begun full-scale improvement efforts to resolve the reverse discrimination between Big Tech (large information and communication companies) and traditional financial sectors, which has recently become a controversial issue.

As companies like Naver actively enter various financial fields, it is interpreted that leaving the controversy in the market unattended could potentially cause setbacks to the overall 'digital and data-centered financial innovation.'

On the morning of the 24th, the Financial Services Commission held the Financial Development Council at the Government Seoul Office in Jongno-gu, Seoul, chaired by Vice Chairman Son Byung-doo, and announced the 'Financial Policy Direction in the Post-Corona Era.'

Through this, the financial authorities expressed their intention to investigate and improve cases where regulatory arbitrage or fairness issues arise, based on the principle of establishing a fair competition foundation between Big Tech and financial companies. In particular, the financial authorities plan to review the regulatory system to realize 'same function, same regulation' from the consumer's perspective.

The day before, Financial Services Commission Chairman Eun Sung-soo met with the heads of the five major financial holding companies and said, "Concerns coexist regarding fair competition issues between (Big Tech and) existing financial sectors and the possibility of systemic risks," proposing participation in a 'Big Tech Consultative Body' involving financial authorities, financial sectors, and Big Tech.

The financial authorities plan to form the consultative body next month, identify tasks, and reflect them in next year's work plan.

Although the overall tone clearly emphasizes establishing a fair competition environment, a somewhat cautious stance is observed in the details. For example, it is not that simple to directly reflect the 'problem cases' raised by financial holding company heads, such as the 'imbalance in the scope of interchangeable MyData between financial companies and Big Tech,' into regulatory policies.

A Financial Services Commission official explained, "It is not easy to define whether the businesses conducted by each company truly perform the same functions," adding, "Depending on the issue, it is necessary to comprehensively consider whether applying the same regulation aligns with the interests of financial consumers and whether it serves the purpose of promoting innovative competition within the financial market."

Establishing a Consumer Protection System to Respond to Big Tech

Meanwhile, the financial authorities have decided to establish a financial stability and consumer protection management system to respond to Big Tech's entry into the financial industry, including ▲ prevention of payment and settlement defaults and related market system risks ▲ strengthening consumer information protection and compensation measures in case of financial accidents ▲ prevention of consumer misunderstanding damages due to platform sales channels and affiliated product launches.

In particular, the financial authorities plan to separately establish principles that financial companies and platform enterprises must comply with when forming partnerships or collaborations. They will also consider preparing model guidelines by sector reflecting these principles.

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