The writer is a non-resident fellow at the Korea Economic Institute of America
It was December 2023 when Robert O’Brien, the national security adviser during Donald Trump’s first term, called out proposed online platform regulation from South Korea. The proposal would designate some American tech companies dominant platform operators, subject to ex-ante regulation. Citing national security consequences, O’Brien argued that Seoul’s regulatory move, which had been heavily influenced by the EU’s Digital Markets Act (DMA), “would be a gift to the Chinese Communist party”, leaving Chinese companies untouched and likely targeting American ones. As tensions escalated, the Korea Fair Trade Commission (KFTC) abandoned the proposed agenda.
The case of South Korea highlights the intricate challenges faced by middle powers in regulating their domestic digital markets, which are largely dominated by American players, without antagonising the new US administration. The country is known for its robust homegrown tech players. But while there is a pressing domestic need to ensure fair competition and tackle monopolistic practices in the digital sphere, irrespective of the companies’ nationality, South Korea fears ratcheting up tensions with the US over platform regulations, even with long-standing trade agreements like the Korus FTA in place.