"Hard to Regulate Big Tech Like This... Fair Trade Commission's Burden of Proof Must Be Lowered" - FTC Task Force

The Korea Fair Trade Commission’s (KFTC) ‘Expert Task Force on Improving Online Platform Regulation’ is discussing the amendment to Germany’s Act against Restraints of Competition as one of the leading models. This approach aims to empower competition authorities in regulating the abuse of market-dominant positions by big tech companies. The current Fair Trade Act is seen as insufficient for swift intervention, which is believed to be allowing market monopolies and oligopolies to grow.

Since its launch in January, the KFTC’s ‘Expert Task Force on Improving Online Platform Regulation’ has held three meetings. They have been discussing the need to amend the current Fair Trade Act for more effective big tech regulation. Various opinions have been exchanged, including the codification of types of anti-competitive conduct in the platform economy (such as self-preferencing, multi-homing restrictions, tying, most-favored-nation clauses, etc.) and criteria for determining market-dominant platform operators (cross-network effects, economies of scale, gatekeeper roles, etc.), as outlined in the ‘Online Platform Monopoly Review Guidelines’ announced by the KFTC in January.

During the three TF meetings, the amendment to Germany’s Act against Restraints of Competition was discussed as a reference option. In 2021, Germany enacted the 10th amendment to the Act against Restraints of Competition (the German version of the Fair Trade Act, GWB), introducing a new concept for determining market dominance: ‘operators exerting overwhelming influence in inter-market competition.’ The criteria include ‘dominant position in one or more markets,’ ‘access to financial resources or other assets,’ ‘activities in vertically integrated and other interconnected markets,’ ‘access to competition-related data,’ and ‘the importance of the operator’s activities for third parties’ supply and sales markets and the resulting impact on third parties’ activities.’

A Fair Trade Act expert explained, “This is similar to Korea’s designation system for large business groups,” adding, “The competition authority sets the designation criteria as the basis for determining market dominance, and operators meeting these criteria are judged as market-dominant.” This significantly reduces the burden on authorities to prove that a specific company holds a dominant position in the relevant market to regulate its abuse of market dominance. The intent is to minimize delays caused by continuous disputes over market dominance and market definition between companies and authorities under competition law.

One expert participating in the TF said, “While various methods to improve big tech monopoly regulation are being discussed in the TF, there are opinions that the European-style strong regulation, the Digital Markets Act (DMA), is excessive, and that the German Act against Restraints of Competition amendment is a more suitable bill that can harmonize with Korea’s Fair Trade Act.” The EU’s DMA, which will be implemented from May, also pre-designates regulated companies (gatekeepers) and introduces their obligations and prohibitions, similar to the German law. However, many view the DMA’s detailed prohibitions on designated gatekeeper companies as excessive compared to the German law, criticizing its per se illegality approach (certain acts are automatically illegal) as too stringent.

The background for considering such legislative system changes stems from concerns that the KFTC’s regulatory enforcement speed is slow compared to the rapidly changing platform economy, resulting in inefficiency. Kim Yoon-jung, a research fellow at the Korea Legislation Research Institute, said, “Regulation under the current Fair Trade Act takes too long,” adding, “First, the market must be defined and it must be confirmed whether a company holds a dominant position, and then the company refutes this, which takes an excessively long time.” She continued, “During the process of the KFTC proving and the business operator disputing, innovation in the market is already being significantly restricted.”

Fair Trade Commission Chairman Han Ki-jung and James Kim, Chairman of AmCham, are attending a special meeting hosted by the American Chamber of Commerce in Korea (AmCham) with the Fair Trade Commission Chairman on the 20th at the Grand Hyatt Seoul Hotel in Yongsan-gu, Seoul. Photo by Dongju Yoon doso7@

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