[비즈한국] With the inauguration of the Lee Jae-myung administration, which pledged the enactment of the 'Online Platform Fairness Act' (On-Platform Act), discussions on online platform regulation are reigniting. The On-Platform Act, which has been pursued as a way to sanction unfair practices by large platforms such as Google, Naver, Coupang, and Baedal Minjok, previously hit a wall due to industry backlash. The focus had shifted to amending the current Fair Trade Act with a watered-down approach, but with the new government in place, some in the ruling party are mentioning a cap on delivery app commissions, leading to predictions that more powerful regulatory measures could be pushed.
While there is a strong call for institutional mechanisms to protect users and ensure fair competition in the market, given that online platforms have rapidly expanded their influence across society and the economy, there is also significant counter-argument that excessive regulation, such as separate legislation, could stifle the autonomy and innovation of the platform industry. Is there an alternative to the 'opposition' against the On-Platform Act? Academia has suggested institutionalizing self-regulation and combining policies through empirical impact analysis, calling for a gradual approach rather than a rigid, hardline regulatory stance.
Platforms function not merely as technology, but as foundational living infrastructure that creates order in daily life and society as a whole. There is a general consensus that as the market dominance and influence of major platforms rapidly expand, the existing regulatory framework has limitations in responding to them.
However, there are also many voices arguing that a regulation-only approach is not the solution. Amid concerns that hardline regulatory methods could impede the innovation and growth momentum of the domestic platform market in a rapidly changing digital environment, experts are proposing flexible institutional designs that complement existing frameworks as a realistic alternative.
Cho Young-ki, Secretary General of the Korea Association of Information and Telecommunication (KAIT), stated at a special seminar on 'Legal Policy Tasks and Response Strategies in the Platform Era' held at the FKI Conference Center in Yeouido, Seoul on the 17th, "Overseas, countries do not hesitate to provide subsidies so that their domestic AI companies can gain a global edge, and they are shifting their policies toward fostering them by recognizing their domestic platform companies as national strategic assets. We, too, must present industry trends and establish future-oriented policies through sufficient discussion."
'Blank Slate' Self-Regulation Needs Clear Rules
The On-Platform Act is a bill designed to prevent unfair transactions by platform operators of a certain size. The Democratic Party, which has been advocating for a 'pre-designation system,' is conceiving a plan to quickly respond to the abuse of dominant positions and the evils of monopoly/oligopoly by large domestic and foreign platforms by pre-designating market-dominant platform companies based on sales, transaction amounts, and market share. Representative Kim Nam-keun's bill targets operators with an average market capitalization or equivalent fair market value of 15 trillion won or more, average annual sales of 3 trillion won or more, or a monthly average of 10 million or more platform users. This applies to foreign platforms like Google, Meta, and Apple, as well as domestic ones like Naver, Kakao035720, and Coupang.
Although discussions over the past five years have led to the adoption of 'ex-post presumption' instead of a pre-designation system, critics point out that limitations remain. Since September of last year, the Fair Trade Commission has been pushing for an amendment to the Fair Trade Act that imposes the burden of proof for the legitimacy of four major anti-competitive practices on the business operators and introduces a temporary suspension order system.
Kim Hyun-soo, head of the Digital Platform Economy Research Division at the Science and Technology Policy Institute (STEPI), explained, "The German law often cited is a pre-designation system and has a one-trial system at the Federal Court. It is clearly different from Korea, which takes 7 to 8 years going through high courts. The reason for making a special law is to regulate quickly when there is a problem, but with the ex-post presumption method, the purpose fades, leading to questions about whether it is necessary to create it at all." He added, "In the case of pre-designation, there is also the issue that predictability is quite low because you need to know the business scale, such as the sales of other operators, to know the accurate market share."
The view that it should eventually be solved through self-regulation is being raised, and for this, the advancement of self-regulation is considered essential. While monopoly/oligopoly issues are difficult to handle through self-regulation, it is argued that rules for self-regulation should be established for matters that do not require separate investigations, such as compliance checks, to determine illegality.
Director Kim emphasized, "Current self-regulation is too much of a blank slate. We need to systematize self-regulation in the areas of transparency and procedural fairness. Joint regulation or regulated self-regulation does not mean 'figure it out yourself.' It means creating a framework with principles under the law, and having stakeholders gather to decide for themselves how to specifically solve problems. It requires improvement in a way that the government steps in to supervise and recommend improvements as needed to ensure it is actually being followed."
Sufficient 'Empirical Evidence' on Industry Impact Needed
Platform regulation, including the On-Platform Act, is a long-cherished task for industries in a "subordinate" position in their relationship with platform operators. Last month, the Korean Publishers Association and the Korea Electronic Publishing Association filed a class-action lawsuit against Google and Apple in the U.S. District Court for the Northern District of California, alleging that the two companies violated the Fair Competition Act through forced in-app payments and high commission fees. Currently, Google and Apple charge commissions of up to 30% when users pay within apps. For example, to top up 10,000 won in a Kyobo Book Centre mobile app, you have to pay 11,000 won. Although Korea implemented an amendment to the Telecommunications Business Act in 2021, the so-called 'In-App Payment Forced Prohibition Act,' both companies are effectively ignoring it.
Discussions on regulating large domestic and foreign platforms began in earnest in late 2020 with the so-called 'Platform 3 Laws.' After turning toward self-regulation early in the previous administration, the stance shifted back to legal regulation following the KakaoTalk service blackout and the massive TMON-WeMakePrice (TMEM) settlement payment default crisis. The issue of search ranking algorithm and review manipulation at Coupang or the Kakao service outage three years ago were among the incidents that raised awareness of the need for platform regulation.
However, there was a common suggestion that empirical analysis should precede regulatory discussions. The consensus is that policy should be designed by avoiding over-interpretation of specific companies' mistakes, such as the TMEM crisis, and by grasping macroeconomic industrial trends beyond political issues.
Park Sung-ho, Chairman of the Korea Association of Information and Telecommunication, said, "We should not approach this through issue-based solutions or political bias without empirical investigation and ecosystem impact analysis." Professor Hwang Yong-sung of Konkuk University stated, "Evidence must be provided constantly through an empirical approach, and policy must move accordingly. We need to focus on driving rational governance."
There is also a perspective that government intervention should be conceived in a direction that institutionally designs and guides the public role of platforms rather than 'suppression.' Director Kim mentioned, "It is not easy to prove anti-competitiveness in court for specific acts like bundling or self-preferencing. Intervention that creates an appropriate industrial environment, such as 'opening up data' or 'allowing third-party app markets,' is necessary. The EU and Japan are specifically defining such measures in their laws."
Recently, it is reported that the ruling bloc has begun the work of merging the 17 On-Platform bills pending in the National Assembly into two: the 'Fairness Act' and the 'Monopoly Regulation Act.' While it appears that the pan-ruling bloc, which holds 190 seats, will accelerate legislation, there is a possibility that discussions will be prolonged due to U.S. trade relations and backlash from the platform industry and academia.
Secretary General Cho Young-ki pointed out, "We need to expand our perspective on platforms and consider even the fundamental parts, such as whether the regulatory tools currently being discussed are the solutions to the problems and whether they have serious side effects."