The Korea Fair Trade Commission is getting ready to unveil a government proposal called the Platform Competition Promotion Act (PCPA). If passed, it will likely target domestic companies like Naver and Kakao, as well as global corporations including Google, Apple, and Meta.
There is already a significant divide between platform industries and consumer groups, with some in favor of the proposal and others against it. Once the Fair Trade Commission’s bill is revealed, a fierce debate based on specific details is expected to ensue. However, the commission seems to be steadfast in its decision to pass the law first and address the industry’s concerns later on.
Multiple sources have reported that the Commission is expected to announce the government’s proposal for the Platform Act this month.
“The inter-departmental consultations for the public release of the proposal are almost complete and they aim to disclose it as soon as possible,” stated an official from the Commission.
The Platform Competition Promotion Act designates dominant platforms as market dominators and prohibits unfair competition practices, such as preferential treatment and tie-in sales.
Although existing Fair Trade laws could address these issues, the introduction of the Platform Act would allow for quicker case processing before major players in the market, who hold monopolistic positions, could further encroach upon the market.
Opinions regarding the Korean Platform Act are sharply divided, even though the government has not yet revealed specific details and targets of the Act.
Many expect that US Big Tech companies will be subject to it. The American Chamber of Commerce in Korea (AMCHAM) released a statement expressing concerns about Korea rushing the passage of the Act. The Fair Trade Commission held two rounds of meetings with AMCHAM members to hear their opinions.
However, some support the Act, emphasizing consumer welfare. The Korea National Council of Consumer Organizations criticized YouTube in a statement last month, pointing out that the company raised the price of its ad-free plan ‘YouTube Premium’ in Dec. 2023, which is a roughly 43% increase. This was considered excessive compared to other countries where the rate was not raised by more than 40% at once, leading to consumer complaints.
The Fair Trade Commission strongly believes that the Act is essential to combat monopolization in the platform market, which tends to grow and become entrenched rapidly.
The Commission argues that once a monopoly is established, it is almost impossible to restore a competitive environment. Currently, the Fair Trade Act procedures take 2-3 years to enforce sanctions, during which time a monopoly may have already emerged. Therefore, the Platform Act is necessary to reduce the duration of this process.
