FTC vows to push for controversial platform act despite growing criticism

Fair Trade Commission Director Yook Sung-kwon explains its plans to legislate the Platform Fair Competition Act at the Government Complex in Sejong, Wednesday. Yonhap

The Fair Trade Commission (FTC) has shrugged off escalating criticisms concerning its move to legislate the somewhat contentious platform act, targeting monopolistic online firms, saying that its enactment aims to minimize possible damage faced by Korean consumers, a ranking official from the antitrust agency told reporters, Wednesday.

The Platform Fair Competition Act is aimed at regulating the dominant online and mobile platform players whose influence is growing at an alarming rate here, which the regulator said will ultimately harm the interest of customers and the fair competition ecosystem in the end.

The move is being met with fierce opposition from not just big firms, but the startup industry, as the possible enactment of the act is feared to weaken the inflow of foreign capital for investment here and hinder innovation across the industry.

FTC Director Yook Sung-kwon, however, stood steadfast, highlighting that customers will end up falling victim to a monopoly situation caused by the platforms unless relevant firms are regulated more thoroughly and as soon as possible.

“Local customers will bear the brunt caused by possible platform monopolization,” he told reporters. Under the current fair trade act, it takes a huge amount of time for the authority to execute investigations, and review and order corrective measures against any monopolistic firms, according to him.

“Once foreign platform firms dominate the local market, customers will be hit hard, and it will be too late for the watchdog to recover the fair competition ecosystem here after that,” he said. The FTC is desperate to build a more specific regulatory system, so it can carry out more practical investigations and implement corrective measures promptly on the monopolistic practices of the platform firms, according to him.

Data showed that the influence of overseas platform firms here is increasing rapidly. According to data from market tracker IGAWorks, the monthly active users of KakaoTalk, the nation’s dominant mobile messenger app, reached around 41.02 million in December 2023. But the figure is expected to be overtaken soon by YouTube, as it is rapidly expanding its presence with a similar number of monthly active users during the same period. The gap between the two narrowed to less than 400 during the same period, according to data.

Yook underscored that the agency will not discriminate between local or foreign platform firms when introducing the standard for the regulation guidelines.

“We will regulate any of the monopolistic platform firms without regard to the location of their headquarters, if they harm the benefits of customers,” he said. “The extraterritorial application of the act is a global standard.”

The FTC director also pledged to enhance communication with the United States and other overseas economies, so that Korea will not fall prey to any possible international trade conflicts.

“We will closely partner with the trade ministry, and minimize possible trade conflict with overseas authorities,” he said. “The FTC, for its part, will emphasize the introduction of the act as part of its efforts to fall in line with the global standard.”