Platform Regulation Strategy to Separate Trade Risks... Fast-Tracking the Online Platform Fair Trade Act

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Legislative debates over online platform regulation have entered a phase where positions are splitting based on trade risk. While antitrust regulations that could be perceived as targeting foreign platform companies are slowing down, there is growing momentum to separate and fast-track the bill on fair trade in transactions between platforms and merchants.

According to the National Assembly on the 4th, the Online Platform Fair Trade Act (the "Bill on the Fairness of Online Platform Intermediation Transactions") has been referred to the 2nd Legislation Subcommittee of the National Policy Committee, with its schedule set for a first review in the first week of March. An official from the National Policy Committee said, "The early-March subcommittee schedule has been arranged following consultations between the ruling and opposition party secretaries on the committee," adding, "There is a consensus that at least placing it on the agenda and starting the review should be feasible." It is also reported that, if the debate falls into a prolonged stalemate, some are raising the need to consider additional tools such as the fast-track procedure.

This move reflects a strategy of abandoning the approach of pushing ahead with platform regulation across the board, and instead separating out and first implementing those regulations that are less likely to cause trade friction with the United States. Given the nature of antitrust regulation, which designates market-dominant platforms first and then imposes ex-ante obligations, the actual targets of regulation are inevitably narrowed down to global big tech companies such as Google, Apple, and Amazon. In this case, the likelihood of a backlash from the United States is high.

Although both antitrust regulation and the Fair Trade Act are grouped together as platform regulations, their approaches differ. If antitrust regulation designates large platforms as market-dominant operators and preemptively restricts self-preferencing and tying, the Fair Trade Act focuses on the fairness of the transaction process for merchants on the platform, regardless of the platform's nationality or market position. Its core is to regulate the intermediation transaction conduct itself, such as prior notice of service restrictions or suspensions and the written delivery of intermediation transaction contracts, and it applies uniformly across both domestic and foreign platforms, including companies like Coupang and Baedal Minjok.

However, some point out that even if antitrust regulations that could provoke opposition from the United States are put on hold, it is difficult to say that trade risks surrounding platform regulation have been completely resolved. Alongside online platform regulation, the United States has bundled issues such as network usage fees and restrictions on data transfers as potential violations of free trade agreements (FTAs) and has been raising concerns. Even if regulations are formally non-discriminatory, there remains room for them to re-emerge as trade issues if their actual effects are concentrated on companies from a specific country.

In his report released the previous day, titled "Country-by-Country Comparison of U.S.-Origin Digital Trade Issues and Implications," Jeon Yoonsik, Senior Researcher at the International Trade and Commerce Research Office of the Korea International Trade Association, stated, "Discrepancies between domestic policies and international standards may lead global companies to claim discrimination, and since this can burden the entire domestic industrial ecosystem by creating potential for trade disputes, more sophisticated policy responses are required." He added, "In Korea, there is even a view that Korean companies are being reverse-discriminated against, and in reality, regulations also apply to domestic companies, so it is important to emphasize that the intention is not to discriminate solely against U.S. companies."

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