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The author is a non-resident fellow on the Korea Financial Institute of America
It was December 2023 when Robert O’Brien, the nationwide safety adviser throughout Donald Trump’s first time period, known as out proposed on-line platform regulation from South Korea. The proposal would designate some American tech corporations dominant platform operators, topic to ex-ante regulation. Citing nationwide safety penalties, O’Brien argued that Seoul’s regulatory transfer, which had been closely influenced by the EU’s Digital Markets Act (DMA), “could be a present to the Chinese language Communist social gathering”, leaving Chinese language corporations untouched and certain concentrating on American ones. As tensions escalated, the Korea Honest Commerce Fee (KFTC) deserted the proposed agenda.
The case of South Korea highlights the intricate challenges confronted by center powers in regulating their home digital markets, that are largely dominated by American gamers, with out antagonising the brand new US administration. The nation is thought for its strong homegrown tech gamers. However whereas there’s a urgent home want to make sure honest competitors and sort out monopolistic practices within the digital sphere, no matter the businesses’ nationality, South Korea fears ratcheting up tensions with the US over platform rules, even with long-standing commerce agreements just like the Korus FTA in place.
In September final 12 months, Republican congresswoman Carol Miller launched the US-Republic of Korea Digital Trade Enforcement Act, claiming that Seoul is contemplating rules that “would unduly burden United States companies whereas benefiting Chinese language know-how corporations”.
Extra lately, Trump’s nominee for US commerce consultant on this topic garnered vital consideration in Seoul. When requested about digital commerce and the EU and South Korea-led rules concentrating on US tech corporations throughout his Senate affirmation listening to this month, Jamieson Greer said: “We shouldn’t be outsourcing our regulation to the EU or Brazil or anybody else, they usually can’t discriminate towards us, and it gained’t be tolerated.”
Moreover, Trump’s current announcement on reciprocal tariffs, which addresses “nontariff limitations” together with “digital commerce limitations”, clearly alerts that any overseas rules with an impression on American tech corporations and platforms could be topic to retribution. Beijing’s current tit-for-tat response to Trump’s extra 10 per cent tariffs on China — particularly, its antitrust investigation into Google — solely reinforces Trump’s view that non-tariff limitations, equivalent to overseas rules towards US tech corporations, ought to be grounds for retaliatory measures.
The truth that the Korus FTA was renegotiated throughout Trump’s first time period carries little weight, as Seoul nonetheless finds itself at odds with Washington, this time on digital commerce. Trump goes after what are thought-about to be amorphous and arbitrary non-tariff limitations below his “fair and reciprocal plan”. Final week, he issued another memorandum shielding American tech, pledging vital actions, together with tariffs, towards “rules imposed on United States corporations by overseas governments that would inhibit the expansion or supposed operation of United States corporations”.
Including gasoline to the fireplace, the persevering with political turmoil in Seoul following South Korean President Yoon Suk Yeol’s declaration of martial regulation in December and the following row over his arrest has solely intensified uncertainty for the nation on this already precarious interval, with a “tariff man” again within the White Home.
Whereas practically two dozen payments associated to on-line platform regulation have been launched within the present South Korean Nationwide Meeting, the DMA’s unfledged “Brussels impact” in South Korea, which had beforehand gained momentum, is now being overshadowed by the Trump impact. As hinted by the KFTC chairman’s comment final week, pledging to keep away from commerce conflicts with Washington over Seoul’s platform regulation efforts, South Korea is dealing with an uphill battle in its try to manage its personal digital markets amid broader financial and commerce issues. There’s additionally apprehension at house that if every other type of platform regulation have been to move, it might be Korean tech corporations that bear the brunt of enforcement, in the end leaving them at a aggressive drawback.
This shifting panorama underscores the stress between South Korea’s regulatory ambitions and the exterior pressures reshaping its coverage. That is more likely to turn into extra pronounced below Trump 2.0 — as policymakers fastidiously assess the broader implications of their selections.
