As South Korea and the United States agreed not to discriminate against U.S. companies or impose ‘unnecessary regulation’ in laws and policies related to digital services, the administration and ruling party effort to advance the Online Platform Act is expected to be put on hold. With the path to ex ante regulation of unfair dealings by global big tech blocked, concerns are rising that consumer choice may shrink and price competition may weaken.

On the 14th, the two countries, through a joint summit fact sheet, stated, “We commit to ensure that, in laws and policies related to digital services, including network usage fees and online platform regulation, U.S. companies are not discriminated against and do not face unnecessary barriers.”

The Online Platform Act, a presidential campaign pledge by President Lee Jae-myung, is broadly divided into ‘the Act on Regulating Online Platform Monopolies’ (the Monopoly Regulation Act) and ‘the Act on Fairness in Online Platform Intermediation Transactions’ (the Fairness Act). The former would designate large platform companies and preemptively block unfair practices such as tying, while the latter mainly aims to protect the rights and interests of platform users such as participating sellers.

With the two countries set to convene a ministerial-level joint committee under the Korea-U.S. Free Trade Agreement (FTA) within the year to finalize an implementation plan for non-tariff areas, advancing the Monopoly Regulation Act has effectively become difficult. The U.S. Congress has objected, arguing that the act could unfairly single out U.S. big tech companies such as Google and Amazon.

Even before this agreement, the government had effectively put the Monopoly Regulation Act on hold in consideration of U.S. opposition. At his confirmation hearing in September, Fair Trade Commission Chair Joo Byung-gi said, “Given the importance of trade negotiations, it is difficult to push the Monopoly Regulation Act aggressively.”

Instead, the government has focused on enacting the Fairness Act, which addresses unfairness in transactions between platforms and merchants. With this agreement, it appears likely that the Monopoly Regulation Act will be abandoned and momentum will shift to the Fairness Act. A government official said in a phone call with a reporter on the 16th, “The Fairness Act does not impose heavy regulation, such as merely requiring online platform intermediaries to issue written intermediation contracts, and because it applies to all platform businesses, its connection to trade issues is not significant.”

This agreement contrasts with the policies of the European Union (EU), which is strengthening regulation of platform monopolies. The EU enacted the Digital Markets Act (DMA) to rein in the market dominance of global big tech and in April imposed a total fine of 700 million euros on Apple and Meta. The EU concluded that Apple operated its app marketplace in a closed manner that restricted consumer choice, and that Meta effectively forced free users of Facebook and Instagram to consent to data collection for advertising purposes.

People's Solidarity for Participatory Democracy said, “The Online Platform Act applies equally not only to U.S. firms but also to domestic monopoly platforms such as Naver and Kakao, so it does not conflict with Korea-U.S. trade talks,” adding, “There is no longer any justification for delaying legislation discussions.”