Korea’s proposed Online Platform Regulation Bill has undergone multiple turns amid political turbulence, pressure from the United States, and intense competition within the domestic tech market. The rise of powerful local platforms and the emerging “Brussels Effect” are reshaping Korea’s approach to digital regulation.

Korea’s proposed Online Platform Regulation Bill has been the subject of significant controversy and has undergone a series of revisions since it was first introduced in 2020. Its future has become even more uncertain as the Trump administration has criticized Korea’s legislative efforts to regulate Big Tech.

I. The significance of the Online Platform Regulation Bill

There are several reasons why the Bill has become a matter of public concern in Korea.

First, the digital economy is becoming increasingly important to Korea’s overall economy. According to Forrester’s 2024 study, Korea’s digital economy is projected to account for 31% of GDP by 2028, ranking sixth globally in absolute size. Government data indicate that online sales in 2024 will represent more than half of total retail sales, with annual growth of 15% online compared to 2% offline.

Second, although Korea’s economic growth is projected to slow, digital platforms may serve as the most powerful tool to overcome growth constraints.

Third, proponents of the Bill contend that regulation is necessary as platforms grow in size and exert substantial influence. In 2024, Naver—the operator of Korea’s leading search engine—recorded revenue exceeding 10 trillion KRW (USD 6.8 billion). Kakao—the company behind the super-app KakaoTalk—had 115 subsidiaries as of May 2025. The scale of these domestic platforms is often compared to that of chaebols—family-controlled conglomerates in Korea—against which preventive regulations have long been applied to mitigate competition risks.

Fourth, the number of small and medium-sized enterprises (SMEs) is substantial, particularly in the retail sector. Many businesses complain that large platforms exploit them in various ways, including through excessive fees and the deprivation of business opportunities. Protecting SMEs is not only a legal issue but also a significant social concern, as SMEs play a crucial role in the labor market. As of 2023, SMEs accounted for 99% of all enterprises and 81% of employment in Korea.

Fifth, many consumers have also observed that the dominance of large platforms can give rise to issues such as higher prices and unfair competition. Korea JoongAng Daily reported: “Spending on food delivery is increasing, and complaints are rising correspondingly.” Growing dissatisfaction among SMEs and consumers has become a political issue in most election cycles.

II. Drivers behind the Bill

The Korea Fair Trade Commission (KFTC) is tasked with regulating the abuse of market power and superior bargaining positions by platforms. Since Korean platforms experienced rapid growth in the early 2000s, the demand for strengthened enforcement of competition law—including the protection of SMEs—has increased. For decades, the KFTC has actively enforced the law, handling over 2,000 cases and imposing more than 200 billion KRW (USD 140 million) in fines annually. However, there has been a growing number of complaints that existing laws are insufficient to address issues arising from the digital economy, particularly the exploitation of SMEs through monopolistic distribution channels, excessive commission fees, and the like.

This trend is not limited to Korea. The European Union (EU) has taken the lead with the Digital Services Act (DSA) and the Digital Markets Act (DMA). Numerous other countries have enacted preventive regulatory frameworks to control Big Tech. These international experiences both provide reference models and create competitive pressure on Korea to enact similar legislation.

III. Continuous changes in management strategy

The KFTC first proposed a version of the Bill in 2020, focusing on unfair transactions in vertical relationships between platforms and SMEs, requiring contract transparency, specifying abuses of bargaining power, and enhancing sanctions. However, the Bill met strong opposition from academia and industry and was not enacted. Opponents argued that existing competition law was sufficient and that, rather than introducing new legislation, the KFTC’s personnel and budget should be increased.

In 2022, the newly elected conservative government initially supported a self-regulatory framework. However, after the Kakao data center fire in October 2022—which resulted in widespread service disruptions—the public called for stronger regulatory oversight. The new proposal introduced obligations for platforms that meet a certain size threshold, including prohibitions on self-preferencing and restrictions on multi-platform monopolization. Nevertheless, it continued to face strong opposition, including from the U.S. government.

By September 2024, the KFTC shifted its approach toward amending the existing competition law rather than enacting a new statute. This proposal did not specify which platforms would be subject to regulation and significantly narrowed the scope of prohibited conduct, while also allowing platforms to justify their behavior by demonstrating efficiencies and benefits. This was viewed as a compromise between the existing legal framework (considered insufficient) and the DMA model (regarded as overly stringent).

While the KFTC scaled back the level of regulatory intervention, the National Assembly moved in the opposite direction. The progressive opposition continued to push for the enactment of a sector-specific statute. By late 2024, seventeen preventive bills had been submitted to the National Assembly. The divergence in views between the legislature and the KFTC has slowed the legislative process.

IV. Dynamic competition in platform markets

The KFTC’s 2024 proposal to amend the competition law is viewed as a compromise between the “Brussels Effect” and the realities of domestic competition. Many scholars and businesses argue that Korea’s platform markets differ from those in Europe and are not suitable for the application of the DMA model. In practice, Korea exhibits a high level of competition across many sectors: e-commerce is contested between online and offline channels, Chinese platforms (AliExpress, Temu) are rapidly expanding their presence, and Google reached nearly a 40% share of the search market in 2024. Domestic platforms are compelled to globalize in order to sustain growth.

Moreover, unlike the EU, domestic companies continue to dominate most digital markets: Naver holds 52.7% of the search market, Baemin 64.9% of the food delivery market, and Coupang 38.6% of the e-commerce market (as of the end of 2023).

Due to the unique market structure and the intensity of international competition, many have expressed concerns that additional preventive regulation could distort the market and harm Korean platforms more than foreign ones. Furthermore, the KFTC has already enforced traditional competition law and unfair trade practice regulations in a highly stringent manner. Accordingly, many contend that the most effective approach is to strengthen the enforcement of the existing legal framework, while increasing personnel and budget where necessary.

V. Criticism from the Trump Administration

Jamieson Greer, the former U.S. Trade Representative under President Donald Trump, publicly criticized the Bill on February 6, asserting that it discriminates against U.S. platforms and that foreign governments should not regulate American companies. Although Greer did not specify which provisions were discriminatory, this argument runs counter to the concerns of Korean platforms regarding the possibility of “reverse discrimination”.

KFTC Chairman Han Ki-Jeong responded that the Bill has a more limited scope than the DMA and does not discriminate against foreign platforms. He also stated that the KFTC would “respond appropriately to prevent the Bill from becoming a trade issue affecting national interests”.

More recently, in July, the U.S. House Judiciary Committee sent a letter expressing concern about the potential for discrimination. The KFTC pledged to treat U.S. platforms fairly. However, on August 25, Trump warned of the possible imposition of significant additional tariffs on countries regulating U.S. platforms, which experts interpreted as including Korea’s Bill.

VI. The Future of the Bill

Debate over the Bill has persisted for many years, and the Trump administration has now become a decisive factor. Given the United States’ significant influence over Korea’s economic policy, the Korean government is expected to proceed with caution (and may even refrain from making explicit commitments) in the near future.

The new President, Lee Jae Myung, inaugurated on June 4, 2025, had pledged during his election campaign to advance the Bill, but it remains unclear whether he will follow through. The new government appears to be negotiating with the United States to minimize the risk of a trade conflict. The future and content of the Bill will depend on the outcome of these trade negotiations as well as domestic deliberations. In any case, the overarching objective remains to promote market competition and the development of Korea’s digital economy.

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