Regulations on Online Platforms to Be Legislated Within the Year

Published 20 Nov.2024 13:53(KST)

Legislative discussions on monopoly regulation and fair trade related to online platform companies are expected to be actively conducted in the National Assembly starting next week. The two bills are scheduled to be discussed at the National Assembly's Political Affairs Committee's bill subcommittee next week. Online platform companies, represented by the so-called 'Nekarakuba' (Naver, Kakao, Line, Coupang, Baedal Minjok), are also facing an emergency.

At a forum held at the National Assembly on the 19th, Kim Nam-geun (61, Judicial Research and Training Institute class 28), a member of the Political Affairs Committee from the Democratic Party of Korea, stated, "Legislative discussions on online platform monopolies and platform transaction fairness will begin in the National Assembly from next week," adding, "We will strive to ensure that the legislation effectively benefits our society." Lee Kang-il, also from the same party, said, "We are also discussing online platform issues with the party leadership." Park Sang-hyuk, the opposition party's secretary of the Political Affairs Committee, emphasized, "It is time to find a solution at the National Assembly level and make legislative decisions within the regular session."

Legal Newspaper

On the 19th, The Law Times held the 2nd Law Times Hero (Here Law & Hear Law) issue forum titled "Between Innovation and Regulation, How to Regulate Digital Platform Monopolies?" at the 6th conference room of the National Assembly Members' Office Building in Yeongdeungpo-gu, Seoul. The forum was organized by The Law Times and co-hosted by Democratic Party members Kim Nam-geun, Kim Yong-man, Kim Hyun-jung, Min Byung-duk, Park Sang-hyuk, Lee Kang-il, Lee Jung-moon, Jo Jang-sik from the Innovation Party, and Yoo Young-ha from the People Power Party.

At the forum, international cases of online platform regulation were shared, and discussions focused on the direction of domestic legislation and the need to strengthen fair competition and consumer protection in the digital market.

Lee Soo-hyung, president of The Law Times, who hosted the forum, said in his welcoming remarks, "I believe fair competition is the most fundamental prerequisite for better development," adding, "This forum was organized for constructive discussions on fair competition in online platforms so that online platform companies can develop further and our daily lives can become richer."

In the first part, Dr. Kim Yoon-jung gave a presentation titled "Monopoly Platform Regulation Measures for Market Innovation." Following her, Jin Burrus, global policy advisor of the App Fairness Coalition, and Jorg Bebendorf, Minister-Counselor of the EU Embassy in Korea, continued with their presentations.

Dr. Kim Yoon-jung explained the current status of domestic legislation related to online platform regulation, saying, "Although the 22nd National Assembly has just begun, many bills have been proposed mainly by opposition party members," and added, "Opposition party bills adopt a prior designation method similar to the EU's Digital Markets Act (DMA) and other major countries, whereas the Fair Trade Act amendment follows a post-presumption method."

She continued, "In the 21st National Assembly, several bills related to monopoly platform regulation were proposed, but since big tech companies have headquarters overseas, enforcement of regulations is practically difficult, causing concerns that only domestic platform companies would suffer from the regulations, leading to reverse discrimination, which caused the legislation to fail." Regarding legislative measures for regulating online platforms, she proposed the prior designation method with △ a careful 'market investigation' for prior designation and △ prior designation when harm or the possibility of harm to competition is clear. Regarding the Fair Trade Act amendment's post-presumption method, she said, "It reflects the opinions of platform operators who find the prior designation method burdensome," and suggested, "Since the prior designation procedure and appeal process are omitted, faster regulatory intervention is possible."

Earlier in September, the Korea Fair Trade Commission (Chairman Han Ki-jung) disclosed an amendment to the Fair Trade Act based on the 'post-presumption' method. The amendment strengthens monopoly sanctions targeting platforms related to six services including brokerage, search, and video.

The prior designation method allows investigations and deliberations without proof once illegal acts occur from companies designated as dominant operators. In contrast, the Fair Trade Commission's amendment does not designate dominant operators in advance but estimates 'dominant operators' based on market share and user numbers, and imposes penalties after final judgment if violations occur, following the post-presumption principle.

Advisor Jin Burrus presented on "Digital Platform Regulation Laws, Overseas Legislative Trends, and Implications for Korea." He said, "Dominant online platforms today maintain continuous market dominance and frequently engage in abusive practices," adding, "In the U.S. Congress, there is bipartisan support for technology-related legislation such as the Open App Markets Act and the American Innovation and Choice Online Act, and legislative efforts are likely to continue in the next administration and the Republican-majority House and Senate."

He further stated, "It is urgent to pass new laws so that all Korean companies can fairly compete and grow with Silicon Valley giants," and emphasized, "Regulatory bills are not to hinder innovation but are essential to create a fair competitive environment according to each company's capabilities."

Jorg Bebendorf, Minister-Counselor of the EU Embassy in Korea, spoke on "Europe's Digital Future Direction, the EU Digital Markets Act, and Implications for Korea," stating, "The goal of the EU's DMA is to create a fair and competitive digital market, with a strong purpose to prevent illegal content and misinformation and to protect specific users such as youth." He added, "DMA is the first legislation to comprehensively include the designation of 'Gatekeepers,' and there is a misunderstanding that the prior designation of 'Gatekeepers' takes a very long time, but the law notified companies just two months after enforcement and completed designation decisions within another two months."

Under the DMA, the EU designated Alphabet (Google's parent company), ByteDance (TikTok's parent company), Amazon, Apple, Meta, Microsoft, and Booking Holdings (Booking.com's parent company) as gatekeepers. Gatekeepers violating the DMA may face fines up to 10% of their global revenue.

In the second part of the forum, chaired by Kim Nam-joo (42, class 37), chairman of the Civil Economy Committee of the Lawyers for a Democratic Society, panelists included Professor Cho Hye-shin of Handong University Law School, Lee Won-chul, Vice President of Research and Industry-Academia Cooperation at Soongsil University, and Kwon Tae-don, advisory committee member of the Korea Internet Corporations Association.

Professor Cho Hye-shin said, "The post-presumption method through the amendment of the Fair Trade Act will greatly help achieve results," adding, "It is desirable that various options besides the existing prior designation method are being presented and discussed."

Vice President Lee Won-chul stated, "Currently, smartphone mobile OSs (Apple's iOS, Google's Android) play a major platform role," and argued, "From an engineering perspective, since various smartphone apps and AI services are being launched, the mobile operating system needs to be sufficiently open so that fair competition occurs in the market and the benefits are enjoyed by corporate users and consumers."

Advisory committee member Kwon Tae-don emphasized, "The necessity of the law can be seen from the fact that various online platform regulation bills were proposed in the 21st National Assembly and more than 20 bills from both ruling and opposition members have been proposed in the 22nd National Assembly," adding, "Especially, since the domestic agent system is mostly handled by law firms or is formal, its effectiveness needs to be reviewed."

This forum was the 2nd Law Times Hero (Here Law & Hear Law) issue forum, where The Law Times deeply discussed legal issues. Previously, in May, The Law Times held the 1st Hero issue forum on the Constitutional Court's decision on statutory share and prospects in the inheritance field.