Washington – The Computer & Communications Industry Association is disappointed by the latest legislative proposal in Korea, apparently backed by the government, to introduce regulation targeting specific companies operating in Korea’s digital marketplace. Since leading U.S. firms are a major target of this proposal, which aims to prohibit a range of common business practices that competing Korean (and Chinese) firms will be free to employ, such market interventions raise serious concerns with respect to Korea’s trade obligations, including under the U.S.-Korea Free Trade Agreement (KORUS).
The new legislation, tabled on October 28, is consistent with goals set out by the Korea Fair Trade Commission (KFTC) on September 9, which CCIA similarly commented on.
The disproportionate targeting of U.S. companies and a narrow focus on online services that U.S. companies provide in Korea is particularly inappropriate for a digital market as dynamic as Korea’s–and where hobbling specific U.S. (and Korean) firms puts them at a competitive disadvantage, including from rapidly expanding Chinese entrants. Before any further action on this bill occurs, the Korean Government, the KCC and MSIT should consult with public- and private-sector stakeholders to assess the current regime and conduct an impact assessment on the effects of this new proposal.
The following can be attributed to CCIA President & CEO Matt Schruers:
“This newly proposed regulatory bill retains many of the counterproductive features of previous bills, including applying thresholds and definitions that have a disproportionately negative impact on U.S. companies.”
“We urge Korean policymakers and legislators to abandon proposals that would target U.S firms and exacerbate the risk of Chinese influence on the essential U.S.-Korean economic and security relationship. Importing experimental regulations from Europe represent solutions in search of a problem, and are counterproductive in a digital economy powerhouse like Korea.”
