Venture and startup sectors, along with associations related to venture capital (VC), have expressed opposition to the 'Platform Fair Competition Promotion Act (Platform Act)' and urged the government to innovate regulations.
On the 18th, the Korea Venture Capital Association (Korea VC Association), together with the Korea Venture Business Association, Korea Startup Forum, and Korea Women Venture Association, issued a statement calling to "halt the enactment of the Platform Act that threatens South Korea's venture ecosystem, and lead regulatory innovation so that domestic venture companies and startups can secure competitiveness in the global market."
The Korea VC Association and others stated, "The enactment of the Platform Act directly contradicts President Yoon Suk-yeol's announcement that 'regulatory innovation is the top national priority,' and it is regrettable that only the necessity of regulation is emphasized while the essential purpose of the legislation?the innovation and growth of venture companies and startups?is forgotten during the legislative process."
They also said, "The Platform Act, which targets only domestic platform companies that can uniquely compete with global platform companies, is a clearly discriminatory bill against domestic companies and runs counter to the global trend where regulations do not increase as companies grow. If the bill passes, the state will effectively assist overseas platform companies in capturing the domestic market. Ultimately, the government will be the only investor left for domestic companies whose growth potential has been closed off," they emphasized.
Furthermore, they stated, "In addition, by significantly restricting the activities of platform companies that have led mergers and acquisitions (M&A) with domestic startups and revitalized the domestic mid-term exit market, it will cause a contraction of the exit market and seriously damage the health of the startup ecosystem in terms of exit and reinvestment. This will lead to a contraction of the venture capital market and a shrinking innovative venture ecosystem, inevitably putting domestic ventures and startups at risk of extinction. It is deeply concerning as it could block the birth and growth of innovative companies, threatening South Korea's survival," they added.
The core of the Platform Act, promoted by the Korea Fair Trade Commission, is to pre-designate key platform operators with market monopoly power and strengthen monitoring to prevent abuse of dominant positions. The related industries have raised concerns that excessive standards targeting only domestic companies may be established.
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