The Trump administration's second term is specifically opposing South Korea's IT regulatory policies, prompting our government to closely monitor the situation. This is because they highlighted the policies such as the imposition of 'network usage fees' targeting American big tech companies, the Online Platform Fairness Act (hereafter Online Platform Act), and the Cloud Security Assurance Program (CSAP) as 'anti-competitive' and creating 'barriers to entry.'
From the South Korean government's perspective, the Trump administration is using mutual tariffs as leverage, making it difficult to enforce regulations on American big tech corporations. Therefore, our government is expected to adjust its policy direction based on international circumstances.
◇ U.S. rebutts Korea's network usage fee policy, Online Platform Act, and CSAP point by point
The Office of the United States Trade Representative (USTR) released the '2025 National Trade Barriers Report' on the 31st (local time) through its website.
In the report, USTR noted that 'multiple bills have been submitted to the National Assembly of Korea requiring foreign content providers to pay network usage fees to South Korean Internet Service Providers (ISPs),' and pointed out that 'imposing network usage fees will strengthen the monopoly of South Korean ISPs and is anti-competitive.'
Network usage fees refer to the compensation paid by content providers (CP) to telecommunications companies that provide internet networks. Recently, there has been controversy as Google and Netflix generate more traffic than Korean companies but pay the same network expenses to the three telecommunications companies, raising concerns about fairness.
Regarding the Online Platform Act, it was noted that 'while it appears to apply to several American companies operating in the Korean market, as well as two Korean companies, many Korean companies and companies from other countries are excluded.' The Online Platform Act currently being pursued by the Fair Trade Commission aims to prevent platforms with annual revenues of over 4 trillion won from abusing their market-dominant positions through self-preferential treatment, tying sales, and demanding most-favored-nation treatment.
USTR's report also claims that the Cloud Security Assurance Program (CSAP) 'creates significant barriers for foreign cloud service providers trying to enter the public sector in Korea.' The CSAP system operated by the Korea Internet & Security Agency (KISA) requires security certification to provide public cloud services. Foreign cloud providers can only possess less sensitive national information when entering the public cloud market under the CSAP system.
◇ South Korean government likely to modify policies to avoid mutual tariffs
The Trump administration plans to implement its 'mutual tariff' policy on the 2nd (local time). This policy targets all countries that have recorded a trade surplus with the U.S., imposing tariffs equivalent to the levels of tariffs and non-tariff barriers those countries impose on U.S. products. The more the South Korean government strengthens its regulations on big tech, the greater the burden on our corporations' business with the U.S.
Our government has continuously asserted the necessity of imposing network usage fees. Minister Lee Sang-im of the Ministry of Science and ICT mentioned during a National Assembly audit in October last year that he would 'help actively resolve' the issue of network usage fees.
However, as the Trump administration has shown discomfort towards imposing network usage fees, the likelihood of the policy being halted is increasing. If network usage fees cannot be imposed on foreign big tech, there are concerns that our corporations will not be able to secure the funding needed for investment, which could weaken the competitiveness of the domestic IT industry. A Ministry of Science and ICT official explained that 'in the case of network usage fees, we plan to determine policy direction considering international circumstances.'
If big tech companies like Apple and Google are exempted from regulations under the Online Platform Act, there are predictions that these companies will rapidly encroach on the domestic market. Apple holds a 39% market share in the domestic smartphone market (based on the fourth quarter of last year), while Google ranks second in domestic search market share after Naver. An industry representative stated, 'If foreign companies become more free from regulations in the platform industry that competes on scale, the domestic platforms will inevitably have their positions further narrowed.'
Concerns have also been raised that relaxing the CSAP grading system for foreign companies could lead to the leakage of sensitive national information. CSAP grades are categorized as high, medium, or low. Generally, foreign cloud companies are assigned a 'low' grade, allowing them to retain only non-sensitive administrative information. If the CSAP standards are relaxed and foreign cloud companies enter the public cloud market in earnest, there are concerns that sensitive information related to disasters, security, and military could also end up on foreign servers.
A representative from the cloud industry stated, 'If regulations on public cloud services are lifted for big tech companies like Amazon Web Services (AWS), Google, and Microsoft (MS), they can immediately enter the market,' and added, 'If domestic companies lose influence even in the public cloud market they have managed to maintain, they could lose their impact in the global market as well.'
An Jeong-sang, an adjunct professor at Chung-Ang University's Graduate School of Communication, noted, 'While observing the trends in U.S. policy, we must maintain a policy direction that sustains appropriate levels of regulation,' adding that 'if regulations are lifted unconditionally, it could weaken the competitiveness of the domestic IT industry.'