Will Domestic Big Tech Face Trillions in Fines Next Year?

Trend of Strengthening Personal Data Protection Regulations
Overseas Fines Imposed Continuously
Various Inspections and Legal Revisions Planned

[Asia Economy Reporter Seungjin Lee] Around the world, regulations on global big tech companies are being strengthened, resulting in fines amounting to hundreds of billions of won. Next year, as related laws are reinforced, the scale of fines will also increase. In South Korea, regulations targeting big tech companies are also being tightened, drawing attention to whether fines in the hundreds of billions of won, rather than light penalties, can be imposed.

Big Tech Shaken by EU Regulatory Strengthening

According to the industry on the 30th, Meta was fined 265 million euros (approximately 368 billion won) by Irish authorities for violating the European Union (EU) General Data Protection Regulation. Earlier this year, Google was fined 150 million euros (approximately 200 billion won) by French authorities because YouTube’s process of refusing 'cookie' collection was deemed complicated. There are analyses suggesting that the fines Meta may have to pay could reach up to 15 trillion won.

The EU will implement the Digital Markets Act (DMA) in May next year. It prohibits processing end-user personal data for advertising purposes and bans self-preferencing. The targets are companies with more than 45 million monthly active end users within the EU in the past year, including global big tech companies such as Google, Meta, and Amazon. Violations of the law can result in fines of up to 10% of global revenue. If the law is violated more than three times in eight years, it is considered an organizational violation, and fines can be imposed up to 20% of global revenue, with mergers and acquisitions (M&A) prohibited for a certain period.

South Korea Also Strengthens Big Tech Regulations

In South Korea, personal data protection regulations are also being strengthened. The second amendment to the Personal Information Protection Act is pending in the National Assembly. The main point is to allow fines of up to 3% of sales revenue for violations. This is less than the 10% of revenue specified in the EU’s Digital Markets Act. However, if converted to fines based on Meta’s revenue of $117.9 billion last year, it would amount to about 4 trillion won.

Although theoretically possible, the law excludes 'revenue unrelated to the violation.' For foreign companies, it is difficult to ascertain specific revenue unless they disclose it themselves. Furthermore, the law stipulates that companies must directly prove whether the revenue is related to the violation. Therefore, there are concerns that imposing astronomical fines like those in Europe will be difficult in practice.

PIPC to Inspect Overseas Transfer of Personal Data

Compared to Europe, the relative scale of fines is small, but the level of regulation is steadily increasing. The Personal Information Protection Commission (PIPC) will conduct an inspection next year on the overseas transfer of personal data for 5,000 applications (apps) with a large number of users. Although targeting 5,000 apps operating domestically, the focus is effectively on global big tech companies such as Google and Meta. The previously ineffective domestic representative system will also be improved. It plans to designate corporations that exert substantial influence domestically as domestic representatives.

The 'Child and Adolescent Personal Information Protection Act (tentative name),' scheduled to be enacted next year, is also notable. It will improve the uniform and practically ineffective legal guardian consent system. Epic Games, the company operating the game 'Fortnite,' was fined $520 million (approximately 670 billion won) by U.S. federal authorities for collecting personal information of children under 13 without guardian consent. Such actions will also be prohibited domestically. Social networking services (SNS) like Instagram and TikTok, which are widely used by children and adolescents, are expected to be affected.

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