Antitrust Enforcers Targeted Big Tech: Then Came the Backlash | World News – Business Standard

The Korea Fair Trade Commission, with the backing of President Yoon Suk Yeol, said in December it planned to submit a proposal modeled on the Digital Markets Act of 2022, the European Union’s main law to rein in U.S. tech giants to keep in check. This bill also seemed to target South Korea’s own internet conglomerates as much as it did the world’s alphabets and metas.

Last week, the agency suddenly changed course. After an angry backlash from South Korean industry lobbyists and consumers, and even the U.S. government, the Fair Trade Commission said it would delay formal introduction of the bill to solicit more opinions. It is not clear when, or even if, the bill will be brought forward. The timing was complicated by the crucial general election in April.

The delay was a temporary victory for South Korean internet companies — dominant at home but with little global influence — who lobbied against the bill behind the scenes. They had argued that the legislation was unnecessary and would ultimately benefit emerging competitors from China.

Regardless of the outcome, this episode signaled a growing need for stricter regulation of technology companies in Asia. It also underscored South Korea’s concerns, which now reflect U.S. concerns about the influence of its powerful tech giants. In the past, it was US tech giants that accused the country’s regulators of overreach, arguing that their protectionist policies created an uneven playing field. But this time, Korean companies led the protest.

Park Seong-ho, chairman of the Korea Internet Corporations Association, said the regulations would limit growth opportunities.

“A dominant platform here will be replaced by another within a few years, and this cycle will repeat itself,” Park said. “It’s like prematurely preventing a big, strong student with the potential to become an athlete from training, for fear he will become a bully.”

The European Union’s Digital Markets Act, which comes into effect next month, limits the influence of so-called gatekeeper platforms that offer dominant technology services. Companies such as Apple, Meta and Microsoft have announced changes to the way they work to comply with the new rules.

But unlike South Korea, Europe does not have any thriving homegrown tech giants, whose businesses may be challenged by regulations.

Han Ki-jeong, chairman of the Korea Fair Trade Commission, said in a statement that the new regulations were necessary. While the country’s digital economy is flourishing, he says, “behind the innovative services and rapid growth is frequent abuse by a few market-monopolizing platforms.”

Naver, Kakao and Alphabet declined to comment on the potential regulations.

First print: February 18, 2024 | 11:15 PM IST