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The author is a non-resident fellow on the Korea Financial Institute of America
It was December 2023 when Robert O’Brien, the nationwide safety adviser throughout Donald Trump’s first time period, known as out proposed on-line platform regulation from South Korea. The proposal would designate some American tech corporations dominant platform operators, topic to ex-ante regulation. Citing nationwide safety penalties, O’Brien argued that Seoul’s regulatory transfer, which had been closely influenced by the EU’s Digital Markets Act (DMA), “can be a present to the Chinese language Communist occasion”, leaving Chinese language corporations untouched and sure focusing on American ones. As tensions escalated, the Korea Truthful Commerce Fee (KFTC) deserted the proposed agenda.
The case of South Korea highlights the intricate challenges confronted by center powers in regulating their home digital markets, that are largely dominated by American gamers, with out antagonising the brand new US administration. The nation is understood for its sturdy homegrown tech gamers. However whereas there’s a urgent home want to make sure truthful competitors and deal with monopolistic practices within the digital sphere, regardless of the businesses’ nationality, South Korea fears ratcheting up tensions with the US over platform laws, even with long-standing commerce agreements just like the Korus FTA in place.
In September final yr, Republican congresswoman Carol Miller launched the US-Republic of Korea Digital Trade Enforcement Act, claiming that Seoul is contemplating laws that “would unduly burden United States companies whereas benefiting Chinese language expertise corporations”.
Extra lately, Trump’s nominee for US commerce consultant on this topic garnered vital consideration in Seoul. When requested about digital commerce and the EU and South Korea-led laws focusing on US tech corporations throughout his Senate affirmation listening to this month, Jamieson Greer acknowledged: “We shouldn’t be outsourcing our regulation to the EU or Brazil or anybody else, they usually can’t discriminate in opposition to us, and it gained’t be tolerated.”
Moreover, Trump’s latest announcement on reciprocal tariffs, which addresses “nontariff boundaries” together with “digital commerce boundaries”, clearly alerts that any international laws with an impression on American tech corporations and platforms can be topic to retribution. Beijing’s latest tit-for-tat response to Trump’s extra 10 per cent tariffs on China — particularly, its antitrust investigation into Google — solely reinforces Trump’s view that non-tariff boundaries, corresponding to international laws in opposition to US tech corporations, must be grounds for retaliatory measures.
The truth that the Korus FTA was renegotiated throughout Trump’s first time period carries little weight, as Seoul nonetheless finds itself at odds with Washington, this time on digital commerce. Trump goes after what are thought of to be amorphous and arbitrary non-tariff boundaries underneath his “fair and reciprocal plan”. Final week, he issued another memorandum shielding American tech, pledging obligatory actions, together with tariffs, in opposition to “laws imposed on United States corporations by international governments that might inhibit the expansion or meant operation of United States corporations”.
Including gasoline to the hearth, the persevering with political turmoil in Seoul following South Korean President Yoon Suk Yeol’s declaration of martial regulation in December and the next row over his arrest has solely intensified uncertainty for the nation on this already precarious interval, with a “tariff man” again within the White Home.
Whereas almost two dozen payments associated to on-line platform regulation have been launched within the present South Korean Nationwide Meeting, the DMA’s unfledged “Brussels impact” in South Korea, which had beforehand gained momentum, is now being overshadowed by the Trump impact. As hinted by the KFTC chairman’s comment final week, pledging to keep away from commerce conflicts with Washington over Seoul’s platform regulation efforts, South Korea is going through an uphill battle in its try to manage its personal digital markets amid broader financial and commerce concerns. There may be additionally apprehension at dwelling that if some other type of platform regulation have been to go, it might be Korean tech corporations that bear the brunt of enforcement, finally leaving them at a aggressive drawback.
This shifting panorama underscores the stress between South Korea’s regulatory ambitions and the exterior pressures reshaping its coverage. That is more likely to change into extra pronounced underneath Trump 2.0 — as policymakers fastidiously assess the broader implications of their choices.
