The National Assembly resumed discussions on the online platform regulation bill (Onplat Act). The major opposition party reiterated its existing stance that strong regulations should be introduced to limit platform dominance. The industry expressed concern that excessive regulations would hinder platform innovation and ecosystem growth.
On the 18th, the Standing Committee on Political Affairs of the National Assembly held a public hearing on the 'Online Platform Regulation-Related Bill.' The hearing was attended by National Assembly officials, legal experts, industry representatives, and representatives from small business organizations. Contrary to the nature of a 'public hearing,' it was conducted behind closed doors.
Currently, the National Assembly has pending amendments to the Fair Trade Act and the Large-Scale Distribution Act proposed by the government and ruling party, as well as the online platform fairness act proposed by the opposition. The government's proposal focuses on post-regulation. Its main approach is to regulate market-dominant platform operators by introducing a post-presumption system. The post-presumption system refers to a process where, if certain criteria are exceeded during the investigation of monopolistic platform violations, they are presumed to be 'dominant platforms,' increasing the level of sanctions. The amendment to the Large-Scale Distribution Act includes measures such as shortening the settlement cycle to prevent issues with unpaid sales revenues.
The opposition's proposal emphasizes the need for regulations to proactively block platform operators' dominance by introducing a 'pre-designation method.' The Democratic Party is pushing to strengthen platform regulations, having proposed 17 related bills to the 22nd National Assembly.
◇ "Excessive regulation negatively impacts both platforms and consumers"
During the hearing, professor Lee Bong-eui from the Seoul National University School of Law emphasized the need for a thorough analysis of market status and harms before introducing platform regulations. Lee noted that while the domestic Onplat Act referenced Europe's Digital Markets Act (DMA), it did not adequately reflect the domestic environment and global competition conditions, urging attention to detail in the legislative process. Lee pointed out that "excessive regulation could harm both the platform ecosystem and consumers," stressing the need for balanced regulation.
Professor Lee expressed concern that platform corporate groups in Korea might experience 'double regulation.' Lee noted that "among the designated disclosure subject corporate groups this year are Kakao (ranked 15th), Naver (23rd), and Coupang (27th), while American big techs are not designated as large corporate groups in Korea," and added, "One must not overlook the fact that special laws could exacerbate the reverse discrimination problem faced by Korean corporations."
Jo Seong-hyeon, secretary-general of the Korea Online Shopping Association, argued that excessive regulation would hinder innovation and growth in the platform ecosystem. Jo warned, "there's a significant risk that operational flexibility in platform operations will diminish and investment funds will decrease," implying that a misguided bill could become a second 'Tada ban law.' Additionally, Jo stated, "If the Onplat Act is enacted, there is a high possibility that international big tech corporations will capture the market."
Jo added, "The online retail market operates without a dominant transactional position, yet the bill is being drafted as though such a position exists," and noted, "Even in the case of the Monopoly Regulation and Fair Trade Act, there is a movement to regard and regulate the market as monopolistic, despite findings by the Fair Trade Commission that the domestic market is highly competitive."
Recently, the American Chamber of Commerce in Korea (AMCHAM), the largest business organization in the United States, also expressed strong concerns about the online platform regulation bill being pushed by the Fair Trade Commission and political circles. AMCHAM reiterated its opposition on Jan. 17 (local time), following a previous statement of concern about the government's platform law in January.
AMCHAM opposes both the government and ruling party's proposal and the opposition's proposal, asserting that "regulations should not be introduced for platform corporations." AMCHAM noted that "the bills submitted to the National Assembly by People's Power legislators and the Fair Trade Commission target specific corporations," and pointed out, "although the targeted corporations have certain business practices banned, the same practices are permitted for competitors." AMCHAM added, "to avoid a situation where these corporations face substantial fines and must justify all business decisions before regulatory bodies, corporations may become less competitive."
◇ "Strengthening platform dominance increases harm... consumer protection is crucial"
There were also calls for the enactment of the Onplat Act to protect consumers and prevent monopolies. Seo Chi-won, head of the online platform user complaints center, claimed, "The strengthening of online platform dominance is harming consumers," and argued for the establishment of a structural and comprehensive regulatory framework involving both the Onplat Act and the Monopoly Regulation Act. Seo supported the 'pre-designation' approach for dominant platforms, emphasizing that consumer protection is of utmost importance.
Seo stated, "The Fair Trade Commission previously clarified the issue of platform regulation through amendments to the Large-Scale Distribution Act," expressing that "The Large-Scale Distribution Act was designed with an offline focus, making it unsuitable for online platforms. Regulating platform intermediary transactions under the pretext of traditional supply envisaged by distribution laws is inappropriate."
Seo continued, "The government should withdraw ineffective self-regulation positions aimed at resolving power imbalances and officially announce the enactment of the Onplat Act," adding that "as the legislative gap remains unattended for a long period, the necessity for establishing the Onplat Act has become more significant than ever."
Jeong Jong-ryeol, advisor to the National Association of Franchisee Owners, stressed the need for independent online platform laws aligned with market changes. Jeong pointed out, "The issues surrounding online platforms, emerging with the market's shift towards online and mobile platforms and characterized by intermediation as a fundamental trait, have only just begun," predicting that "these will have broader and deeper impacts on the entire society, particularly centered around economic domain transactions."
Jeong stated that "the current online platform regulations being established are expected to serve as a foundational basis for this, necessitating the enactment of an independent online platform law for a more efficient and rational foundation."
Jeong also pointed out unfair practices in delivery platforms. Jeong noted, "The government proposal does not include grounds for a cap on fees and preferred fees," and argued that "legal rationale for the brokerage fee cap and preferred fees, also included in the delivery app autonomous consultation group mutual growth plan, should be incorporated."