As Korea and the United States finalized the "joint fact sheet," the final product of tariff negotiations and security consultations, attention is focusing on how the deal will affect Korea's IT industry. With the fact sheet stating that "Korea and the United States will ensure that U.S. corporations are not discriminated against in laws and policies related to digital services, particularly regarding network usage fees and online platform regulation," Google's request to the Korean government to allow the overseas transfer of 1:5,000-scale high-precision map data is expected to enter a new phase.
As the United States directly mentioned digital regulation in the fact sheet, there is speculation that it will put the brakes on the ruling party's push for the Online Platform Act and the imposition of network usage fees on overseas big tech.
According to the industry on the 17th, the fact sheet posted on the White House website states that U.S. corporations should not be disadvantaged in the digital arena, including the Online Platform Act, network usage fees, and location information. The fact sheet includes the phrase, "Korea and the United States will ensure that U.S. corporations are not discriminated against or subject to unnecessary barriers in laws and policies related to digital services." It also states, "We commit to facilitating the cross-border transfer of data, including location information, reinsurance, and personal information, and support a permanent moratorium in the World Trade Organization (WTO) on imposing a tariff on electronic transmissions."
U.S. big tech corporations such as Apple, Google, and Microsoft (MS) have urged relief from what they called "non-tariff barriers," including Korea's disapproval of exporting location information and network usage fees. In a report published last month, the U.S. nonprofit Competere Foundation argued, "If the Korean government continues to pursue policies that restrict major services such as online distribution, social media, maps, and logistics that U.S. big tech corporations provide to Korean customers, the two countries will suffer economic losses amounting to $1 trillion (about 1,400 trillion won)." It is analyzed that the longstanding grievances of big tech corporations were reflected in this negotiation.
The domestic industry also expects that the fact sheet will affect the government's review of Google's request to export high-precision maps. Early this year, Google asked the government to allow the export of domestic high-precision maps at a 1:5,000 scale. On the 11th, the government postponed the related review for the third time and asked Google to supplement documents by Feb. 5 next year. Google held a press briefing in September and promised to take steps to hide domestic coordinate information and mask security facilities in satellite images, but it has not submitted an additional supplementation application to the government.
Citing security concerns, the government rejected Google's request to export high-precision maps in 2007 and 2016. While it is deliberating again with security concerns in mind, there is speculation that continued U.S. pressure could tilt the decision toward approval.
The Computer & Communications Industry Association (CCIA) of the United States earlier issued a statement criticizing that "the Korean government is unjustifiably delaying approval for the overseas export of digital map data," calling it "a measure that hinders the development of advanced navigation, logistics, and mobility services." Regarding the condition that Google install a data center in Korea, one of the terms for accepting Google's map export request, they also said, "Imposing a local data center maintenance obligation on foreign corporations only creates expense burdens and competitive disadvantages and may also run counter to the nondiscrimination principles guaranteed in the Korea-U.S. Free Trade Agreement (KORUS FTA)."
Domestic tourism industry players and corporations operating related IT services say that because the government has not allowed the export of maps, Google's map service is not functioning properly and 10 million foreign tourists visiting Korea are experiencing inconvenience. The government bans the overseas export of detailed maps more precise than a 1:25,000 scale for military or security reasons, while Google has argued that it cannot implement the navigation function on Google Maps with a 1:25,000 scale map and therefore export should be allowed. Google and the tourism industry say that the satellite images used in maps are materials photographed and sold by private satellite companies and are accessible to anyone—individuals, corporations, and governments worldwide—if purchased, so allowing Google to provide navigation services based on a 1:5,000 scale map would not suddenly increase security threats.
On the other hand, Naver and Kakao, which operate map services, worry that if the government allows map exports, domestic corporations could lose leadership in the future spatial services industry to Google or Apple.
However, even if the government review tilts toward allowing map exports, fine-tuning is expected to take time. Presidential Chief of Staff for Policy Kim Yong-beom earlier said, "On the high-precision map export case, we agreed on the principle of 'equal treatment,' so we will continue consultations on individual matters," adding, "Apple accepted the plan proposed by the Korean government without issue, while Google still has differences of opinion that require consultation."
There also appear to be constraints on the push by the government and ruling party to legislate the Online Platform Act and network usage fees. The Information Technology and Innovation Foundation (ITIF), a U.S. private think tank, assessed the provisions stated in the fact sheet as "an agreement explicitly banning regulations that Korean policymakers seek to impose on U.S. technology companies." It added, "This agreement removes 'non-tariff barriers' such as network usage fees and the Online Platform Act."
Hur Yoon, a professor at the Sogang University Graduate School of International Studies, said, "The fact sheet does not in principle have legal binding force, but because of the significant power asymmetry in Korea-U.S. relations, even an MOU without coercive force for the United States can have binding aspects for Korea," adding, "The Online Platform Act, network usage fees, and high-precision map export issues have been defined as non-tariff barriers and strongly opposed by the Office of the United States Trade Representative (USTR) in its annual reports, so pressure is likely to continue going forward."