[Exclusive] "Platform Fairness Act Is Not Overlapping Regulation with the Electric Utility Act"... Regulatory Reform Committee Supports Fair Trade Commission

Passed the Regulatory Reform Committee's plenary review of the 'Platform Fairness Act' on December 18 last year
Previously, the Korea Communications Commission claimed "overlapping regulation with the Telecommunications Business Act"
Fair Trade Commission: "Government bill to be submitted to the National Assembly within this month"

Jongwook Cho, Chairman of the Korea Fair Trade Commission. (File photo)

[Sejong=Asia Economy Reporter Joo Sang-don] It was confirmed on the 5th that the Regulatory Reform Committee concluded that the "Fair Trade Commission's Act on the Fairness of Online Platform Brokerage Transactions (Platform Fairness Act) is not overlapping regulation with the Telecommunications Business Act." Previously, the Korea Communications Commission raised objections, expressing concerns that the Platform Fairness Act might conflict with the Telecommunications Business Act, but the Regulatory Reform Committee sided with the Fair Trade Commission.

On this day, a Fair Trade Commission official said, "The Platform Fairness Act passed the plenary review of the Regulatory Reform Committee on December 18 last year," adding, "This means that the Fair Trade Commission judged that the Platform Fairness Act it is promoting does not constitute overlapping regulation with the Telecommunications Business Act."

The Platform Fairness Act regulates unfair practices between platform operators such as Google, Naver, and various delivery applications, and the merchants operating on these platforms. Due to the transition to a digital economy, the surge in non-face-to-face transactions caused by the novel coronavirus disease (COVID-19), and the acceleration of market concentration due to network effects, unfair trade has become a reality in the online platform sector. However, existing policy tools have limitations in effectively responding to this, leading to the judgment that a separate law is necessary to regulate this. In fact, online platforms, as intermediaries, are not subject to the Large-scale Distribution Business Act, and the Fair Trade Act lacks provisions requiring contract provision and standard contracts to prevent disputes and improve transaction practices.

Accordingly, the Platform Fairness Act obliges platform operators to prepare and provide contracts to merchants, transparently disclosing transaction conditions to prevent disputes in advance. It also mandates that key items be compulsorily specified in the contracts. Furthermore, it concretizes and applies the prohibition of abuse of superior bargaining position under the existing Fair Trade Act to fit the characteristics of the platform industry. Previously, the Fair Trade Commission conducted a legislative notice from September 28 to November 9 last year (40 days).

During the process of gathering opinions from related ministries, the Korea Communications Commission raised concerns about overlapping regulation, stating, "The Telecommunications Business Act already prohibits acts that significantly harm the interests of telecommunications users by providing telecommunications services, and the enforcement decree defines prohibited acts such as imposing unreasonable or discriminatory conditions or restrictions unfairly on users."

In response, the Fair Trade Commission argued that "the Telecommunications Business Act targets businesses and users, whereas the Platform Fairness Act regulates platform operators and merchants, so it is not overlapping regulation." The fact that the Platform Fairness Act passed the Regulatory Reform Committee's review means the committee drew a clear line on concerns about overlapping regulation.

A Fair Trade Commission official said, "With the overlapping regulation controversy settled for now, we plan to submit the amendment bill to the National Assembly within this month after review by the Ministry of Government Legislation and the Deputy Prime Minister and Cabinet meetings," adding, "If the bill is passed, it will be an opportunity to establish a transparent and fair trading order between platform operators and merchants."

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