VC Raising Unicorns Also Worries About Platform Act: "Second Coupang or Baemin Impossible"

The Fair Trade Commission's push for the 'Platform Competition Promotion Act,' which includes preemptive regulations on platform companies, has raised concerns among venture capital firms.

On the 21st, Lee Jun-pyo, CEO of SoftBank Ventures, posted on LinkedIn, "If the Platform Competition Promotion Act is introduced as is, the competitiveness of the IT industry and startup ecosystem will be overall weakened, and foreign platform companies will gain indirect benefits, ultimately leading to a national loss." He questioned, "If regulations target only domestic tech companies, who will take a big-picture view and invest in Korean startups?" He also expressed concern that "it will become increasingly difficult to witness innovative startups like Naver, Baedal Minjok, and Coupang in Korea." SoftBank Ventures is a venture capital (VC) firm that has created unicorn success stories by investing in Korean online platform companies such as Danggeun Market, Hyperconnect, and Naver Z.

Kim Han-joon, CEO of Altos Ventures, which invested in Coupang and Baedal Minjok, also voiced opposition. Kim stated on Facebook, "The Platform Competition Promotion Act will impose more restrictions and burdens once companies grow to a certain size," and predicted, "It will become even harder for small companies to become the next Coupang, Baemin, Naver, or Kakao, and the money invested in Korea will likely be limited to government funds."

Kim cited the 'Three Strikes Out' rule under the Copyright Act, implemented at the end of July 2009, which accelerated user attrition from domestic video platforms like Pandora TV, causing a shift toward foreign platforms such as YouTube. He assessed that the current situation where the Fair Trade Commission is pushing the bill is similar to the past case where Pandora TV collapsed under pressure from YouTube.

On the 19th, the Fair Trade Commission reported to President Yoon Seok-yeol at the Cabinet meeting regarding the introduction of the Platform Competition Promotion Act. The bill includes pre-designating certain platforms as 'dominant operators' and fundamentally prohibiting unfair practices such as self-preferencing. Although detailed criteria have not been released, platform companies like Naver, Kakao, and Coupang are expected to be subject to the regulations.