Report from Korea JoongAng Daily
In Brief – The Chairman of the Korea Fair Trade Commission (KFTC), South Korea’s antitrust regulator, has said that the government would maintain close dialogue with their US counterparts regarding its proposals to police giant digital platforms following indications from the new Trump Administration that regulation of US-based digital companies was “unacceptable” and could be met by retaliatory tariffs. The KFTC proposed competition law amendments last fall to regulate the largest digital platforms. The legislation would ban four anticompetitive practices — self-preferencing a platform’s own companies, tie-in sales, restrictions on multihoming, and demands for favorable management. Although the draft legislation would likely impact both US and South Korean platforms, for example Google and Apple as well as Naver and Kakao, the Trump Administration’s US Trade Representative nominee said in a Senate confirmation hearing that digital services are “an area where the United States is very competitive” and when asked about South Korea’s legislation said, “We should not be outsourcing our regulation to the European Union or Brazil or anyone else”. South Korea is sensitive to tariff threats as it currently enjoys zero percent effective tariff levels with the US under its free trade agreement.
Context – The US digital giants have a much different relationship with President Trump as he begins his second term than last time around. He talks about CEOs reaching out to him to complain about unfair treatment, especially in Europe, and he often refers to the Digital Services Tax standoff with France in 2020, saying, “I have to protect American companies whether I like them or not, some I might not even like.” Then add Elon Musk and crypto industry-backers to the mix. Meta has been open about appealing to the US Government if they believe regulatory enforcement is not balanced. At the same time, both China and the EU are considering using the digital giants as justifiable retaliation targets in response to non-tech Trump Administration tariffs. South Korea seems unwilling to go that route.