Regulatory Bills That Die and Come Back to Life... Companies Are Shaking

Reporter Dongju Yoon doso7@

[Asia Economy Reporter Kiho Sung] As the number of bills proposed has surged in the 21st National Assembly, regulatory bills that were discarded due to the expiration of the 20th National Assembly's term are also being reintroduced. In particular, bills targeting specific companies are being revived, and with the increasing likelihood of their passage, related companies appear to be on high alert.

According to the National Assembly Bill Information System on the 15th, a total of 2,375 bills (including 21 bills still pending as of July 31) were proposed in the form of member legislation during the two months since the opening of the 21st National Assembly (May 31 to July 31). This is a significant increase compared to 424 bills in the 18th, 842 in the 19th, and 1,131 in the 20th National Assembly during the same period.

As the number of bill proposals increases, so do the 'recycled' bills. Especially in the case of regulatory bills, those that were discarded at the end of the 20th National Assembly are being reintroduced one after another. A representative example is the 'Naver Shopping Regulation Act.' Recently, Park Yong-jin of the Democratic Party of Korea proposed 51 bills in a single day. Among these, the 'Monopoly Regulation and Fair Trade Act' drew controversy for directly targeting Naver Shopping and was discarded in the 20th National Assembly.

This bill includes provisions allowing the Fair Trade Commission to conduct written surveys to disclose the sales commission rates of portal sites and open markets. Naver Shopping, Gmarket, 11st, Coupang, and others have been classified as telecommunication sales intermediaries rather than distributors under the Electronic Commerce Act, and thus have not disclosed their sales commission rates.

The problem is that the bill does not limit the investigation to sales commission rates but allows the Fair Trade Commission to set the scope. Because of this, the industry is concerned that promotional expenses, advertising costs, and service effectiveness could be included in the disclosure scope. An industry official said, "If advertising costs used by only a few sellers are included in the commission, the total commission cost could be excessively calculated," adding, "Differences in each business model must be taken into account."

In the distribution sector, as the Distribution Industry Development Act evolves and the scope of regulations expands broadly, it is expected that Lotte Shopping and Shinsegae will suffer the most significant impact. Democratic Party lawmaker Lee Dong-joo has proposed a bill to introduce mandatory closures not only for large supermarkets but also for duty-free shops, department stores, and complex shopping malls. Lotte Shopping and Shinsegae, which focus on offline stores, are inevitably affected. The mandatory closure scope also includes stores like Daiso. A distribution industry official pointed out, "Offline stores are already struggling enough," and added, "If forced closures are introduced, small business owners operating in these stores will also be hit."

The 'Financial Group Integrated Supervision Act,' promoted by the ruling party and the government, is another representative 'revived regulatory bill.' This bill includes measures for financial authorities to manage the financial soundness of financial groups that own two or more types of financial companies and have assets exceeding 5 trillion won. According to this criterion, Samsung, Hyundai Motor, Hanwha, Mirae Asset, Kyobo, and DB are subject to it, and the Financial Services Commission is also considering including Naver and Kakao.

The business community is already anticipating this outcome but is closely watching whether the bill will pass. A business official said, "During the 20th National Assembly, there was public opinion that it was 'targeting specific companies to kill them,'" adding, "However, with the emergence of a giant ruling party holding 177 seats in the 21st National Assembly, there is great concern that the bill will pass."

Professor Tae-yoon Sung of Yonsei University's Department of Economics emphasized, "It is problematic if lawmakers perceive the act of proposing bills itself as a performance," and added, "There should be a process to review whether the bills have undergone rational and reasonable scrutiny."