Han Ki-jeong, Chairperson of the Fair Trade Commission, stated regarding the Trump administration's response to Korea's platform regulations, "We will respond appropriately from a national interest perspective to prevent the issue from developing into a trade problem." Amid strong opposition from the United States against platform regulation movements in various countries including Korea, the Fair Trade Commission is expected to carefully review policy directions while minimizing trade conflicts.
On the 17th, Chairperson Han stated at a press conference held at the Government Sejong Center, "We are closely monitoring the new U.S. administration's fair trading policies" and added, "We will consult with the National Assembly during the legislative process to ensure that changes in the trade environment are comprehensively considered, and we will strengthen ongoing communication with the United States." As the Fair Trade Commission emphasized its intention to continue consultations with the U.S. in the promotion of the amendment, there is speculation that the intensity or scope of regulation may be adjusted, or the implementation of the amendment may be partially deferred.
Currently, the Fair Trade Commission is promoting an amendment to the Fair Trade Act that includes not only domestic platforms such as Naver and Kakao but also foreign platforms such as Google and Meta as subjects of regulation. If the amendment is implemented, there is a high possibility that regulations will be introduced to preemptively block anti-competitive practices of market-dominating platforms.
However, the United States is opposing the amendment, claiming that it is a discriminatory regulation aimed at its corporations. In particular, Jamie Grier, a nominee for the U.S. Trade Representative (USTR), strongly criticized the online platform regulation movements in various countries including Korea during a Senate Finance Committee confirmation hearing on the 6th (local time), stating, "It is unacceptable." He indicated the possibility of trade retaliation, saying, "We will take strong measures to ensure that U.S. corporations are not discriminated against."
The Fair Trade Commission plans to closely examine the applicability of the Fair Trade Act regarding the controversy over Korea Zinc's overseas subsidiaries' investments. According to current regulations, mutual investments among domestic subsidiaries are prohibited, but there is no clear regulation regarding investments through overseas subsidiaries, leading the Fair Trade Commission to cautiously review its legal judgment.
Chairperson Han stated, "We are looking into whether Korea Zinc's purchase of domestic subsidiary equity through its overseas subsidiaries is a legal act that avoids mutual investment and circular investment regulations" and noted, "We have received a relevant report and plan to determine legal violations through fact verification, data requests, and opinions gathering."
According to the Fair Trade Commission, it has been reported that Korea Zinc purchased domestic subsidiary stocks through its overseas subsidiary, Sunmetal Holdings in Australia. The reporting party, Young Poong and MBK, views this as a legal act that bypassed mutual investment and circular investment regulations under the Fair Trade Act.
Currently, under Article 21 (Prohibition of Mutual Investment) and Article 22 (Prohibition of Circular Investment) of the Fair Trade Act, mutual investment and circular investment among domestic subsidiaries belonging to conglomerates are generally prohibited. However, it is not clear whether investments using overseas subsidiaries are subject to regulation, leaving room for domestic subsidiaries to avoid legal application through investments via overseas subsidiaries.
The Fair Trade Commission recognizes that applying regulations under current law is not easy in cases involving overseas subsidiaries. However, as the reporting party raised concerns about potential violations of Article 36 (Prohibition of Legal Acts) of the Fair Trade Act, it plans to review the applicability of the law after verifying the facts.
Additionally, the Fair Trade Commission is accelerating its review of large mergers and acquisitions (M&A) in the semiconductor design market. The commission stated that in light of the impact on the domestic semiconductor industry, detailed scrutiny is necessary for U.S. Synopsys's acquisition of Ansys.
Synopsys and Ansys are respectively ranked first and fourth in the semiconductor design software (EDA) market, supplying chip design software to major domestic semiconductor firms such as Samsung Electronics and SK hynix. The Fair Trade Commission has raised concerns about whether this merger may restrict competition in the semiconductor design market and has presented the agenda for review earlier this month. The Synopsys-Ansys case will be the first application of the 'voluntary corrective action submission system' that was implemented last August and is expected to be finalized after a plenary session review.
The Fair Trade Commission is also speeding up improvements to strengthen payment stability for small and medium-sized subcontractors. Chairperson Han stated, "We are pursuing comprehensive improvement measures to expand protections ensuring subcontractors receive their payments on time."
To this end, the Fair Trade Commission is planning to hold the first meeting of the 'Subcontract Payment Guarantee Strengthening Task Force' on the 25th. The task force will include experts recommended by academia, the legal field, and business organizations to discuss ways to reduce exemptions for subcontract payment guarantees.
The Fair Trade Commission is also pushing for a revision of notices to clearly define the practice of withholding part of the subcontract payment in the construction industry as an unfair special provision. The administrative announcement was completed as of last month, and the committee for regulatory reform will review this, with implementation set to begin next month.
In the distribution industry, measures to shorten payment deadlines for suppliers are also being considered. The Fair Trade Commission noted that following the Teemf incident, opinions were raised across the distribution sector regarding the overly long payment deadlines after the introduction of the 'Large-Scale Distribution Business Act Amendment.'
In fact, in a written survey conducted this year in the distribution sector, a significant number of the 139 surveyed distribution and supplying companies, including department stores, home shopping, and online shopping malls, reported that the legal payment deadlines for direct purchases and special purchases (60 days and 40 days) were excessively long. Consequently, the Fair Trade Commission is conducting a written survey of 139 distribution brands and supplying companies across 11 types including department stores, TV home shopping, and shopping malls. Based on the survey results, the Fair Trade Commission plans to evaluate the appropriateness of the current payment deadlines and review the necessity for system improvements.
Meanwhile, the Fair Trade Commission announced that it is operating an 'Online Advertising Agency Fraud Reporting Center' to eradicate illegal activities of online advertising agencies. This comes in response to the increase in cases of damage, such as contracts being signed under the guise of platform providers or public institutions and imposing excessive penalties after inducing low-performance keyword advertisements. The Fair Trade Commission established the reporting center in collaboration with the Korea Internet Advertising Foundation starting from the 11th.