[The Editors' Verdict] Thoughts on the Online Platform Fairness Act

Recently, intense debates have been ongoing regarding the legislation of the Online Platform Fairness Act. This law, justified by the protection of users and businesses utilizing online platforms, faces criticism that it imposes excessive regulations on online platforms, thereby hindering their innovation. The issues are diverse, ranging from whether the regulatory authority over online platforms should be the Korea Communications Commission or the Fair Trade Commission.

The ideal and principle of fairness is a very important value. Especially in recent times, fairness is rarely considered as crucial or chanted as a slogan across most areas of our society, including politics, economy, society, and education. Therefore, fairness in the online platform sector itself is an undeniable value and reality. However, the problems that arise when attempting to secure or enforce fairness in the online platform sector through legal regulation must be considered.

First, confusing the nature and characteristics of internet services with traditional offline manufacturing industries may lead to preemptive regulations that hinder the continuously evolving innovation of online platforms. It is necessary to consider whether there is a risk that online platforms might be legally defined as a specific form or type of service, and that regulations might confine the various concrete services or contractual behaviors conducted through online platforms into a fixed framework.

Second, the new enactment of the Online Platform Fairness Act may overlap with existing legal regulations or become a redundant layer of regulation. Much of the proposed Online Platform Fairness Act by the Fair Trade Commission and related bills may overlap with the Fair Trade Act, which already governs contracts and trading practices between businesses in Korea. Furthermore, many cases pointed out as unfair trade practices by some online platforms can mostly be regulated within the existing framework of the Fair Trade Act. Therefore, if unfair trade practices on online platforms can be sufficiently regulated based on the Fair Trade Act, the claim that "regulation is impossible due to lack of law" may not be valid.

Third, if the scope of online platforms regulated by the Online Platform Fairness Act is set excessively broad, it may result in overregulation. The Act covers online platforms including portals, online shopping malls, and open markets, but the problem is that it may impose uniform regulations without considering the diversity and specificity of each platform’s information and transaction mediation methods. Thus, if the definition of online platform operators subject to regulation is overly broad, it may lead to the error of generalization and raise issues of overregulation.

Fourth, it is necessary to consider whether there is any infringement on the freedom of business and trade secrets of online platforms. For example, requiring contracts to specify the order, form, and criteria by which goods or services are exposed on the platform, demanding disclosure of the main principles determining search and arrangement rankings, or forcing users to be able to choose whether and how personalized criteria are applied may excessively compel the disclosure of information that constitutes trade secrets of online platform operators. This could seriously restrict the operation of recommendation systems, which are core competitive advantages of online platforms, and potentially infringe on the business freedom of online platform operators.

Hwang Seong-gi, Professor, Hanyang University School of Law