US Think Tank Warns "Onple Act Is a Digital Barrier... Threatens Section 301 Trade Retaliation"

Cited as a Digital Non-Tariff Barrier

Calls for Moderating Legislative Pace and Fact-Based Persuasion

An American think tank has identified the Online Platform Fairness Act (Onple Act), currently pending in the National Assembly, as a representative digital non-tariff barrier and has warned of the potential for future trade friction between Korea and the United States. This comes just one week after Google, through the Computer & Communications Industry Association (CCIA) of the United States, obtained high-precision mapping data from the Korean government for the first time in 19 years, further increasing uncertainty over the direction of domestic digital policy.

Han Hangoo, Director General for Trade Negotiations at the Ministry of Trade, Industry and Energy, is responding to questions from the Special Committee members at the plenary meeting of the Special Committee for the Passage of the Special Act on Investment in the United States held at the National Assembly on the 4th. On the right is Deputy Prime Minister and Minister of Economy and Finance Koo Yoon-chul. Photo by Yonhap News Agency

The National Bureau of Asian Research (NBR), a Washington, DC-based think tank, published a report on the 4th titled "Korea's Online Platform Fairness Act: A New Digital Non-Tariff Barrier in Korea–US Trade." NBR identified the regulatory design approach as the most significant issue with the Onple Act. The report argued that, because the regulation targets entities based on their status as large-scale platforms rather than their individual business activities, American big tech firms will end up shouldering a considerable portion of the regulatory burden. NBR assessed that, even if the Onple Act does not formally discriminate against American companies, it will result in 'de facto' discrimination against them.

NBR urged the Office of the United States Trade Representative (USTR) to respond actively, such as by considering retaliatory measures under Section 301 of the Trade Act, which provides grounds for imposing countervailing tariffs against violations of reciprocal tariff agreements. In the report, NBR emphasized, "The Trump administration should consider the Onple Act as a persistent source of trade friction and treat it as a top priority on the digital trade agenda," adding, "The USTR needs to clarify that it can justify escalating measures, including responses under Section 301 of the Trade Act."

Furthermore, NBR pointed out that, while the Onple Act shares an ex-ante regulatory framework similar to the European Union's Digital Markets Act (DMA)—another law regulating unfair practices by big tech—the procedural safeguards in Korea's law are even weaker. The definition of 'unfair' is broad, fines can reach up to 10% of sales, and the scope and implementation of the law are delegated to presidential decrees, all of which significantly reduce regulatory predictability for businesses.

The Korean government maintains that the Onple Act is not a regulation targeting companies from any specific country and believes the United States is misunderstanding its intent. On March 4, Han Hangoo, Director General for Trade Negotiations at the Ministry of Trade, Industry and Energy, attended a Korea-US tariff-related meeting hosted by the Korea-US Parliamentary Alliance at the National Assembly and stated, "It is extremely important to accurately explain our policy intentions and prevent misunderstandings regarding the various bills under discussion in the National Assembly." This remark is interpreted as being made with the US backlash against the Onple Act and other legislation currently under review in mind.

The government has been working to reduce misunderstandings by explaining the legislative intent and content to US counterparts. In consideration of US opposition, the Onple Act was split into two bills: the Monopoly Regulation Act, which regulates abuses of market dominance such as monopolistic practices, and the Transaction Fairness Act, which bans unfair transactions between platform operators and vendors. The government has prioritized moving forward first with the Transaction Fairness Act, which has less direct connection to American companies.

With the Trump administration recently launching an investigation under Section 301 of the Trade Act, some analysts suggest that Korea should moderate the pace of digital regulatory legislation amid growing uncertainty in the trade environment. On March 5, Lee Hwang, Professor at Korea University School of Law, said in a phone interview, "Given the strong influence of external factors, it is realistically difficult for the government to push ahead with the Onple Act solely according to its own intentions," adding, "The only breakthrough is to persuade the United States based on objective data, such as the domestic market situation, actual cases of harm, and clear evidence that the Onple Act is the best solution to address these issues."

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