Fair Trade Commission Reconsiders Pre-Designation of 'Platform Act' Amid Industry Backlash

Re-discussion of Core Conflicts Including 'Pre-designation' Status

The Fair Trade Commission is reconsidering the enactment of the 'Platform Competition Promotion Act (Platform Act),' which designates large platform companies as dominant operators in advance, from scratch. The 'pre-designation' method, which has been a major point of conflict with the industry, is also under review.

On the 7th, Cho Hong-seon, Vice Chairman of the Fair Trade Commission, told reporters at the Government Complex Sejong, "We are open-mindedly reviewing whether there are other alternatives that can produce similar effects, including the pre-designation system."

Vice Chairman Cho explained, "We are communicating extensively with domestic and international industries and stakeholders," adding, "We are going through an additional opinion-gathering process considering the impact of the bill on the market."

They intend to seek alternatives that can expect similar effects to pre-designation but with less market impact, and to hear more opinions from academia and related parties.

The original draft of the Platform Act was to comprehensively consider sales and market share to pre-designate dominant platform operators and prohibit frequent unfair practices in the market such as self-preferencing, tying sales, restrictions on multi-homing, and forced most-favored-nation treatment.

The Fair Trade Commission has emphasized the necessity of legislation, stating that since platform markets rapidly become monopolized due to network effects and are not easily corrected, pre-designation of dominant operators is inevitable to regulate before monopolies take hold.

[Image source=Yonhap News]

In response, the industry has opposed, arguing that pre-designating companies before illegal acts occur is excessive regulation. There have also been concerns that designating overseas big tech companies like Google and Apple as dominant operators could raise trade issues with the United States.

Regarding criticism that the legislation might be rolled back due to industry opposition, Chairman Cho emphasized, "Industry opinions have been expressed in various ways, and the intention is to reflect them."

He added, "Inter-ministerial consultations have been sufficiently conducted, and a considerable consensus has been formed," but explained, "However, it means we will further examine whether there are reasonable alternatives that can achieve the purpose by reflecting industry opinions along with parts that can be regulated under the existing Fair Trade Act."

He stated, "Once the specific contents of the government proposal are prepared, they will be disclosed promptly," but did not specify the announcement timing.

The Fair Trade Commission had been conducting final consultations on the detailed contents of the Platform Act with related ministries such as the Ministry of Science and ICT, the Korea Communications Commission, the Ministry of Trade, Industry and Energy, and the Ministry of Economy and Finance, and was scheduled to announce the government proposal for the Platform Act as early as this month.

With the decision that additional opinion gathering is necessary just before the government proposal announcement, it is expected that considerable time will be required until legislation and implementation.

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