As the United States reacts against South Korea's platform regulations, attention is drawn to the Fair Trade Commission's direction regarding YouTube Music and Netflix. The Fair Trade Commission is strengthening regulations on global platform operators under the justification of protecting domestic consumers and revitalizing market competition, but the United States regards this as discrimination against its corporations, raising the possibility of trade friction.
According to the industry on the 24th, the Fair Trade Commission is expected to conclude its investigation soon regarding Google's 'bundling of YouTube Music.' The issue is that the policy allowing YouTube Premium subscribers to use YouTube Music for free has led to the exclusion of competitors in the domestic music market. The Fair Trade Commission believes that YouTube Music, sold in conjunction with YouTube Premium, has restricted consumer choice and made it difficult for competitors to enter the market. As a result, there is a possibility of forcing a separation of video and music services to allow YouTube Premium subscribers to choose.
YouTube Music's position in the domestic music market is becoming even more solidified. Starting last year, YouTube Music has risen to the top position, surpassing Melon and Genie. In the domestic music service industry, it is reported that YouTube has established a de facto monopoly status in the music market by leveraging its strengths as a video platform, and the Fair Trade Commission also believes there is a need to improve this structural problem.
Netflix is also included among the targets of the Fair Trade Commission's sanctions. The Fair Trade Commission has determined that Netflix did not clearly provide consumers with the option to terminate their subscription and complicated the termination procedure, thereby infringing on consumer rights.
The Fair Trade Commission sent a review report to Netflix last August. Typically, it takes 6 to 9 months for major cases to be reviewed, so there is a high possibility that a conclusion will be reached in the first half of this year.
The problem is that the Fair Trade Commission's measures could likely escalate into trade conflicts between South Korea and the United States. President Trump recently defined the online platform regulations in South Korea and the European Union (EU) as 'non-tariff barriers' and stated that he would consider trade retaliation if necessary. In particular, the Trump administration has hinted at the possibility of raising tariffs concerning South Korea's Fair Trade Act amendments, increasing pressure on the South Korean government.
On the 6th, Jameson Greer, the nominee for the U.S. Trade Representative, strongly criticized the regulatory movements of countries, including South Korea, during his confirmation hearing. He noted, "It is unacceptable for U.S. corporations to be discriminated against in foreign markets," and stated that he would actively respond if the digital regulations of other countries have an unfair impact on their corporations.
In this situation, if the Fair Trade Commission sanctions American corporations like Google and Netflix, it is possible that the U.S. side would interpret this as South Korea's 'foreign corporation suppression measures' and react accordingly. An industry insider remarked, "The Trump administration has already reacted strongly against South Korea's Fair Trade Act amendments, so will the Fair Trade Commission be able to push for sanctions against YouTube Music to the end?"
On the other hand, the Fair Trade Commission has previously imposed stringent sanctions on American IT corporations, leading to speculation that it will conduct its review in accordance with the law and principles in this case as well. In fact, the Fair Trade Commission imposed a penalty surcharge of 32.4 billion won on Microsoft in 2006, 26.6 billion won on Intel in 2008, and 273.1 billion won and 1.03 trillion won on Qualcomm in 2009 and 2016, respectively. In 2021, there was also a case where Google was imposed a penalty surcharge of 22.49 billion won for allegedly forcing anti-competitive contracts on domestic smartphone manufacturers like Samsung Electronics and LG Electronics.
The Fair Trade Commission has stated that it will proceed with its review based on principles separate from U.S. trade pressure. Fair Trade Commission Chairperson Han Ki-jeong, during a meeting with reporters, emphasized that "there should be neither excessive regulation nor insufficient regulation" and noted that reviews will be carried out rationally according to the law and principles, without discrimination against domestic and foreign corporations.
Oh Hwang, a professor at Korea University Law School, stated, "If the Fair Trade Commission enforces the law according to global standards, it can have credibility even under U.S. pressure," and emphasized that while it is likely that the Trump administration will exert strong pressure, it is undesirable to abandon the normal enforcement of current laws.