The National Assembly has resumed discussions on the Online Platform Regulation Bill. The major opposition party reiterated its previous stance that strong regulations should be introduced to limit platform dominance. The industry expressed concerns that excessive regulation would hinder platform innovation and ecosystem growth.
On the 18th, the National Assembly's Political Affairs Committee held a public hearing on the 'Online Platform Regulation-Related Bills.' The hearing was attended by National Assembly officials, legal experts, industry representatives, and representatives from small business organizations. The hearing was conducted privately, contrary to the expression 'public hearing.'
Currently, the National Assembly has tabled amendments to the Fair Trade Act and the Large-Scale Distribution Business Act proposed by the government and ruling party, as well as the Fair Online Platform Act spearheaded by the opposition. The plan by the government and ruling party focuses on ex-post regulation. It is centered on introducing an ex-post presumption system targeting dominant platform operators. The ex-post presumption system means that when investigating anticompetitive conduct by monopolistic platforms, if certain criteria are exceeded, they are presumed to be 'dominant platforms,' thereby increasing the level of sanctions. Amendments to the Large-Scale Distribution Business Act include contents such as shortening the settlement cycle to prevent issues with unpaid sales fees.
The opposition bill adopts a 'pre-designation method,' arguing that it is necessary to preemptively block platform operators' dominance. The Democratic Party is showing a tendency to strengthen platform regulation by proposing 17 bills related to the online platform law since the start of the 22nd National Assembly.
◇ "Excessive regulation may adversely affect platforms and consumers"
At the hearing, Professor Lee Bongui from Seoul National University's School of Law emphasized that market status and impacts must be closely analyzed before the introduction of platform regulations. Professor Lee noted that "Korea's Online Platform Act referenced the European Digital Markets Act (DMA), but did not fully reflect the domestic environment and global competition context," calling for meticulousness in the legislative process. Lee underscored that "excessive regulation may harm not only the platform ecosystem but also consumers," stressing the need for balanced regulation.
Professor Lee expressed concern that platform corporations in Korea could be subject to 'dual regulation.' He noted, "Among the business groups designated for disclosure this year are Kakao (15th), Naver (23rd), and Coupang (27th), while U.S. big tech companies are not designated as business groups in Korea," adding that "overlooking this may exacerbate discrimination against Korean corporations with the enactment of special laws."
Choe Seonghyeon, secretary-general of the Korea Online Shopping Association, argued that excessive regulation would impede innovation and growth of the platform ecosystem. Choe stated, "The flexibility of platform operations may decrease, and there are concerns about a decline in investment funds," warning that a misguided bill could become a 'second Tada ban law.' He further noted, "If the Online Platform Act is enacted, there is a high possibility that foreign big tech firms may take over the market."
Choe pointed out, "Although the online retail market does not have a superior bargaining position, it is preparing legislation based on the premise of such superiority," adding that "even in the case of the antitrust law, the Fair Trade Commission acknowledges the domestic market as a competitive one, yet there are moves to regulate it as a monopolistic market."
Recently, the United States Chamber of Commerce, the largest economic organization in the U.S., also expressed strong concerns about the online platform regulation bills being pushed by the Fair Trade Commission and the political circles. The U.S. Chamber of Commerce reiterated its opposing stance on the 17th (local time), following its expression of concerns about the government's platform law in January.
The U.S. Chamber of Commerce opposes both the government and ruling party's proposals as well as the opposition's proposals. Their argument is that "regulations should not be introduced for platform corporations." The U.S. Chamber pointed out, "The bills submitted to the National Assembly by People's Power members and the Fair Trade Commission target specific corporations," adding that "affected corporates face prohibitions on a set of business practices that are permitted to competitors." The Chamber further noted that "companies may become passive in competition to avoid being fined heavily and having to justify every business decision in front of regulatory authorities."
◇ "Harm from strengthened platform dominance increases... consumer protection is important"
There were also voices arguing that legislation of the Online Platform Act is necessary to protect consumers and prevent monopolies. Seo Chiweon, head of the Online Platform User Complaints Center, said that "the strengthening dominance of online platforms harms consumers" and insisted, "A systematic and comprehensive regulatory framework should be established for both the Online Platform Act and the Monopoly Regulation Act." Seo supported the method of 'pre-designating' dominant platforms and emphasized the importance of consumer protection above all.
Seo pointed out that "the Fair Trade Commission previously identified issues with platform regulation through amendments to the Large-Scale Distribution Business Act," commenting that "since the Large-Scale Distribution Business Act is designed with an offline focus, it is not suitable for online platforms. The existing distribution law regulation, which assumes supply, is inappropriate for platforms' transaction brokerage activities."
Seo continued by stating, "The government should retract its ineffective self-regulation stance in order to resolve imbalances of power, and should formally announce the legislation of the Online Platform Act," adding that "due to the prolonged legislative vacuum, the necessity for enacting the Online Platform Act has grown more than ever."
Jung Jongyeol, an advisor for the National Franchise Association, emphasized the need for an independent online platform law tailored to market changes. He noted that "the online and mobile platform transformation and the arising brokerage issues of online platforms are merely in their infancy" and anticipated that they "will have a larger and more profound impact on society centering around economic transactions."
Jung stated, "The current preparations for online platform regulations are expected to form the basic foundation for this, necessitating the establishment of an efficient and rational foundation through the creation of an independent online platform law."
Jung also pointed out examples of unfair practices by delivery platforms. He remarked, "The government plan lacks a basis for a commission cap and preferential commission," adding, "A legal basis for capping brokerage commissions and preferential commissions should be included, as also proposed in the self-regulatory coexistence plan of delivery app associations."