Designating Domestic Corporations Required
Parliament Amended Related Laws
Companies Without Corporations Still Problematic
Calls for Strengthening Effectiveness Grow
[Asia Economy Reporter Seungjin Lee] Meta, which operates Facebook and Instagram, has raised the white flag by withdrawing its 'consent to collect personal information' policy, but the issue remains unresolved. The 'domestic agent designation system,' often mentioned when global companies like Google and Apple cause problems in Korea, is still a pending task. There is a growing call to effectively revise the domestic agent system to protect users' rights and strengthen the accountability of overseas businesses.
Meta Issue Settled for Now, but an Unpleasant Aftertaste
On the 28th of last month, seven domestic civic groups, including the Citizens' Coalition for Economic Justice (CCEJ) and People's Solidarity for Participatory Democracy, visited Meta's domestic agent office located in Jongno-gu, Seoul, to submit an opinion letter regarding Meta's personal information policy. However, the office was closed, and no representatives were available to meet.
Currently, under the Information and Communications Network Act, Personal Information Protection Act, and Telecommunications Business Act, information and communication service providers without an address or place of business in Korea but with sales exceeding a certain amount are required to designate and operate a domestic agent. Accordingly, Meta established a company and designated a domestic agent in 2019 in line with the system's implementation.
The domestic agent system is criticized as being virtually ineffective. The Personal Information Protection Commission is currently investigating whether online service companies have violated laws regarding personal information collection, separate from Meta's withdrawal of its consent policy. However, Meta's domestic agent is not participating in the investigation. Instead, a domestic law firm is responding to the inquiry.
Google, Apple, Meta Domestic Agents Located in One Building
Calls for improvement of the domestic agent designation system have continued for years. Although the system was introduced to protect domestic users' rights and strengthen the accountability of overseas businesses, suspicions persist that paper companies are being used as domestic agents.
The Seoul address where Meta's domestic agent office is located also houses the domestic agents of Google, Apple, Amazon, and others. Most of these domestic agents were established rapidly during the early days of the system's implementation, with multiple law firms registered at one office or no employees working there, raising suspicions of being paper companies.
The National Assembly has also taken steps to improve the 'domestic agent system.' In June, the plenary session passed an amendment to the Telecommunications Business Act requiring foreign companies with domestic corporations to designate those corporations as their domestic agents. If an overseas value-added telecommunications business has a domestic corporation or a corporation that exercises dominant influence over executive composition or business operations, that corporation must be designated as the domestic agent. Overseas companies like Google Korea and Apple Korea must change their domestic agents to domestic corporations by the end of May next year in accordance with the amendment.
The problem arises when companies do not have a domestic corporation or, even if they do, remain uncooperative. During recent controversies such as Meta's issue and Google's mandatory in-app payment policy debate, domestic corporate representatives uniformly responded that they "have no authority." They claim that all decisions are made by the headquarters.
In response, civic groups have urged the National Assembly to prepare measures including △solutions to problems caused by personalized ads infringing on users' personal information △regulations to curb monopolistic big tech companies' unfair competition and consumer harm △measures to make the domestic agent system for foreign companies more substantive. However, due to difficulties in organizing the second half of the National Assembly, it is challenging to establish practical countermeasures.
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