Korea's business circle remains dissatisfied with FTC's plan to review platform act

The nation’s business circle remains dissatisfied with the latest decision by an antitrust watchdog to reconsider legislation of a controversial platform act. They urged the authority to abandon the planned regulation, arguing that it has only increased unnecessary confusion across the industry over the past few months, industry officials said, Thursday.

The reaction followed the Fair Trade Commission's (FTC) announcement overnight regarding its decision to delay the enactment of the legislation. This move signifies a retreat from its previous stance of pushing for the legislation and revealing details before the Lunar New Year. The FTC's decision comes in response to increasing criticism from academic and industry circles, both domestically and internationally.

Previously, the watchdog underscored the importance of the timely enactment of the Platform Fair Competition Act, aiming to regulate large online platform firms in the areas of industry, mobile and e-commerce, so they cannot exert abusive and monopolistic influences.

But a string of clauses attached to the regulation has drawn a severe backlash from local platform firms, and even U.S. authorities. One key aspect of the act involves the pre-designation of market-dominant business players, who are then prohibited from cross-selling their online services and subject to increased regulatory scrutiny by the watchdog.

Despite the FTC's toned-down approach, industry officials continue to express concerns about the potential enactment of the legislation.

“It will be virtually impossible for the authority to set a fair and clear standard for the designation of the dominant market players, at a time when the watchdog has yet to exactly figure out specific earnings by foreign big tech firms here,” an official at a platform company said on condition of anonymity.

The most contentious aspect of the act revolves around concerns over potential reverse discrimination against local platform firms. Last week, the U.S. Chamber of Commerce voiced concerns over what appears to be a rushed push for the platform act by the FTC. There is a high likelihood that a group of industry-leading U.S. tech firms, including Google, Apple, and Meta, could be included in the list of pre-designated dominant market players, adding to the complexity of the issue.

The FTC is also aware of such concerns and stated its intention to conduct a further review of the pre-designation of monopolistic market players, as confirmed by the watchdog's Vice Chairman Cho Hong-sun.

“We will take more time to listen to the opinions of experts and academics, rather than (hastily) sharing details of the act,” Cho told reporters during a briefing, Wednesday. “But we will not abolish the pre-designation policy, and will keep reviewing whether there are any other alternatives.”

Another industry source also complained about the FTC’s confusing gestures.

“The latest gesture ended up heightening uncertainties in the market,” an official at a platform company said on condition of anonymity. “It became harder for us to predict whether the authority will push ahead with or drop the earlier plan for its legislation.”