🚨 Online Platform Law

Today Korean Social News for Beginners | 2025.08.02

0️⃣ Digital Market Regulation and New US-Korea Trade Tensions

📌 Education Law Amendment Creates New Trade Friction Concerns

💬 The government's proposed Elementary and Secondary Education Act amendment is becoming a new source of US-Korea trade tensions when combined with the Online Platform Law. The amendment classifies all digital education tools, including AI digital textbooks, as 'educational materials' and requires approval from the Personal Information Protection Committee and school board review before use. This means overseas platforms like Google Classroom and MS Teams must also get approval, raising concerns that the US may view this as discriminatory regulation against American companies. The Online Platform Law already regulates unfair practices by large platforms, and the US already considers it a non-tariff barrier. If extended to education, trade friction could worsen significantly.

💡 Summary

• The Online Platform Law prevents unfair practices by large online platforms.
• The education law amendment requires approval for using overseas education platforms.
• The US may see this as discrimination against American companies, raising trade conflict concerns.

1️⃣ Definition

The Online Platform Law is legislation that prevents unfair trading practices by large online platform companies and creates fair competition in digital markets. Its official name is the 'Online Platform Fairness Act', which classifies platforms above a certain size as designated businesses subject to pre-regulation.

This law is modeled after Europe's Digital Markets Act (DMA) and mainly prohibits platforms from giving priority to their own services or excluding competitors. Its main goals are to improve monopolistic structures in digital markets and strengthen user protection.

💡 Why is this important?

• It's key legislation for creating fair competition in digital markets.
• It prevents consumer harm from platform monopolies and protects small businesses.
• It establishes Korea's digital sovereignty in line with global digital regulation trends.
• It's a policy tool that significantly affects international trade relations.

2️⃣ Main Content and Regulated Targets of the Online Platform Law

📕 Designated Business Criteria and Regulations

• Platforms above a certain size are classified as designated businesses. Main criteria include:

  • Platforms with over 10 million domestic users or annual revenue over 1 trillion won.
  • Platforms with over 50% market share in specific markets are also included.
  • This covers large domestic platforms like Naver, Kakao, and Coupang, plus overseas platforms like Google and Amazon.
  • Designated businesses must follow pre-notification duties and various prohibited practices.

• Core prohibited practices and transparency duties are strengthened. Main regulations include:

  • Prohibiting giving priority to own products or services over competitors.
  • Prohibiting blocking or unfavorably treating competitors' service access.
  • Restricting use of user data for other services without consent.
  • Requiring transparent disclosure of search algorithms and ad ranking criteria.
  • Providing advance notice and sufficient review time for terms of service changes.

📕 Sanctions and Enforcement System

• Strong sanctions are in place. Main penalties include:

  • Fines up to 8% of annual revenue for violations.
  • Administrative measures like correction orders and business suspension are possible.
  • Fine rates increase for repeat violations.
  • Criminal punishment clauses create strong deterrent effects.

• The Fair Trade Commission is designated as the enforcement agency. Main roles include:

  • Selecting and monitoring designated businesses.
  • Authority to investigate violations and impose sanctions.
  • Providing guidelines through continuous communication with industries.
  • Pursuing enforcement that meets global standards through cooperation with international regulators.

💡 Key Issues with the Online Platform Law

1. Regulatory Scope: Unclear standards for what constitutes unfair practices
2. Innovation Hindrance: Concerns about reduced tech innovation and investment due to excessive regulation
3. Global Conflicts: Potential trade friction with major countries like the US
4. Enforcement Capacity: Effectiveness issues with regulators lacking expertise and resources
5. Fairness: Controversies over discriminatory application between domestic and foreign companies

3️⃣ Connection with Education Law Amendment and Trade Conflict Concerns

✅ Core Content of Elementary and Secondary Education Act Amendment

• Approval procedures are required for all digital education tools. Main changes include:

  • All digital learning tools, including AI digital textbooks, are classified as 'educational materials'.
  • Prior approval from the Personal Information Protection Committee is required before use.
  • School board review is necessary for use in educational settings.
  • Overseas platforms like Google Classroom, MS Teams, and Zoom are also subject to approval.

• Concerns about restrictions on autonomy and efficiency in education. Main problems include:

  • Complex approval procedures may delay introduction of new educational tools.
  • Teachers may face restrictions in freely using various digital tools.
  • Difficulty responding quickly to rapidly changing digital education environments.
  • Potential decline in use of excellent overseas education platforms.

✅ Potential for Expanded US-Korea Trade Conflicts

• The US is likely to view this as a non-tariff barrier. Main concerns include:

  • The US government already sees the Online Platform Law as discriminatory regulation against American companies.
  • Extension of regulation to education could worsen bilateral trade friction.
  • Market access for US companies like Google and Microsoft in Korea could be restricted.
  • The US may argue this violates the spirit of the Korea-US Free Trade Agreement (FTA).

• Various trade pressure measures may be deployed. Expected scenarios include:

  • Formal concerns and consultation requests through the US Trade Representative (USTR).
  • Filing complaints with the WTO dispute resolution body or applying pressure in bilateral trade negotiations.
  • Retaliatory measures like anti-dumping investigations or safeguards on Korean products.
  • Indirect pressure through restrictions on high-tech cooperation or strengthened investment screening.
  • Long-term negative impacts on US-Korea technology cooperation and digital partnerships.

4️⃣ Related Terms

🔎 Digital Markets Act (DMA)

• EU legislation regulating digital platforms.
  • The Digital Markets Act is a law enacted by the EU in 2022 that designates large digital platforms as 'gatekeepers' for pre-regulation. Its purpose is to prevent abuse of platform market dominance and create fair competition.
  • Main DMA content includes: First, designating platforms above a certain size as gatekeepers. Second, imposing duties like prohibiting preferential treatment of own services and discrimination against competitors. Third, requiring restrictions on user data combination and ensuring portability. Fourth, fines up to 10% of annual revenue for violations.
  • Korea's Online Platform Law was modeled after this DMA, with similar regulatory principles and sanctions. However, some content was adjusted to fit Korea's market situation and legal system.

🔎 Non-Tariff Barriers

• Measures that restrict trade through methods other than tariffs.
  • Non-Tariff Barriers refer to various measures that restrict imports or protect domestic industries without imposing tariffs. This typically involves strictly applying technical standards, safety regulations, and environmental criteria to make foreign products' market access difficult.
  • Main types include: First, technical regulations and standards that set strict safety, environmental, and quality criteria. Second, quarantine and sanitary measures requiring strict inspections for agricultural products and food. Third, direct quantity restrictions through import licenses or quota systems. Fourth, preferential treatment for domestic companies in government procurement.
  • The Online Platform Law and education law amendment are seen as non-tariff barriers because overseas companies face additional regulatory burdens when entering the Korean market or providing services, potentially weakening foreign companies' competitiveness.

🔎 Digital Sovereignty

• A nation's autonomous decision-making and control rights in the digital sphere.
  • Digital Sovereignty refers to a country's right and ability to autonomously make policies and exercise control over its digital infrastructure, data, and digital services. It's an extension of traditional territorial sovereignty into the digital realm.
  • Main elements include: First, data sovereignty meaning control over citizens' personal information and important data. Second, platform sovereignty including regulatory authority over domestic digital platform markets. Third, technological sovereignty meaning self-reliance in core digital technologies. Fourth, cybersecurity sovereignty meaning security capabilities in cyberspace.
  • The Online Platform Law can be seen as a policy tool to strengthen Korea's digital sovereignty. It aims to check foreign large platforms' market dominance and establish Korea's own digital market order. However, finding a balance is important as this approach may conflict with international trade norms.

5️⃣ Frequently Asked Questions (FAQ)

Q: How will the Online Platform Law affect consumers?

A: There may be short-term inconveniences, but long-term benefits are expected from fair competition.

• Positive effects include: First, platforms will provide more transparent and fair services. Practices of unfairly favoring specific companies in search results or product exposure will disappear. Second, personal information protection will be strengthened, preventing unauthorized misuse of user data. Third, small sellers will get fair opportunities, expanding consumer choice. Fourth, increased competition between platforms may improve service quality and reduce fees.
• However, there may be some short-term side effects. Platforms might pass regulatory compliance costs to users, potentially raising fees. Some innovative services might be delayed or restricted. Most importantly, platform operations might become unstable during initial regulation, causing temporary service quality decline, requiring careful policy management by the government.

Q: Will overseas platforms become unusable in education?

A: They won't be completely unusable, but approval procedures may significantly restrict their use.

• According to the Elementary and Secondary Education Act amendment, overseas education platforms like Google Classroom and MS Teams must undergo Personal Information Protection Committee approval and school board review before use. While this aims to strengthen student personal information protection, it may practically involve several restrictions. First, complex and time-consuming approval procedures will make it difficult to quickly utilize new tools in education. Second, some overseas platforms may give up providing services due to difficulty meeting Korea's strict personal information standards. Third, schools will only be able to use approved platforms, restricting teachers' choice of educational tools.
• However, the government states it will operate the system to strengthen student protection without lowering educational quality. They're considering rapid approval procedures for excellent overseas education platforms or providing standard guidelines to simplify the approval process. The education sector emphasizes finding a balance between student protection and educational innovation is most important.