[Reporter’s Notebook] No Communication, Only Rumors... The Opaque Platform Act

The Fair Trade Commission has entered its second month of pushing for the enactment of the ‘Platform Competition Promotion Act (Platform Act).’ The law aims to designate platform companies with monopolistic positions as ‘dominant operators’ and prohibit unfair practices. Although it has entered the final stages of deciding the detailed contents of the bill, the regulatory targets have yet to even take a rough shape.

However, various speculations are rampant in the market. Recently, there have been forecasts that Coupang and Baedal Minjok will be excluded from designation as dominant platforms. These companies are the number one operators in the online distribution market and the delivery platform market, respectively, and were considered highly likely to be regulated. The exclusion criteria are unclear. The reasons cited include that their market shares are not high enough to be considered monopolistic, the competition in their markets is intense, and their scale is small compared to other markets. Since it is unknown on what basis the possibility of excluding Coupang and Baemin arises, platform companies are left to gauge the regulatory proposal based on the situations of these companies.

Within the industry, there are complaints that only confusion has increased over the past two months. Coupang’s U.S. corporation owns 100% of the shares of Coupang Korea, and Baedal Minjok’s major shareholder is the German company Delivery Hero. The weight of opinion is that regulation of foreign companies will be difficult due to diplomatic issues. This ultimately fuels concerns that only large domestic platforms such as Naver and Kakao will be targeted.

The Fair Trade Commission keeps repeating that “nothing has been finalized” in response to these industry concerns. Since no details of the regulatory proposal have been disclosed, communication with the industry is virtually nonexistent. The Digital Economy Alliance, which gathers major domestic ICT cooperative organizations, postponed a scheduled meeting with the Fair Trade Commission at the industry’s request, and at last week’s meeting with global companies, major big tech firms such as Google, Apple, and Meta all did not attend. The Fair Trade Commission’s stance is to avoid formal opinion gathering unless it releases specific details of the Platform Act proposal.

The Platform Act is a regulation that could directly impact not only the regulated companies but also small business owners collaborating with them, users, and furthermore, the domestic related ecosystem. It is hard to accept that such a regulation with significant market ripple effects is being pushed forward in the dark without proper forums or empirical research, despite the serious harms of platform monopolies. It is also problematic if it creates a perception that domestic companies are being unfairly disadvantaged.