Startup Alliance (Director Lee Ki-dae) published an issue paper titled “Korean Platform Industry Trapped in Regulations Now Needs a Promotion Strategy” on the 3rd. This report highlights the strategic importance of the platform industry in the era of the global digital economy, and critically analyzes that Korea’s platform regulation discussions are at odds with global trends and are weakening the competitiveness of domestic companies.
This report pointed out that while major countries such as the US, China, and the EU are introducing strategic regulations to protect and foster their own platform companies, Korea is taking a regulation-centered approach that places excessive burdens on domestic companies. In the 22nd National Assembly, 17 related bills have been proposed, including the 'Online Platform Transaction Fairness Act' and the 'Monopoly Regulation Act', and the Fair Trade Commission also reiterated its will to strengthen regulations on the platform industry in its New Year's address. However, these regulatory policies are not only disadvantageous to domestic companies that must compete with large overseas platforms, but also exacerbate the problem of reverse discrimination, so they require in-depth reconsideration.
The report categorized the platform regulation bills proposed to the National Assembly into the “fair trade type,” “monopoly regulation type,” and “mixed type,” and pointed out that these bills do not reflect the characteristics of the platform industry and are likely to hinder innovation. In particular, it pointed out that provisions such as brokerage commission rate control are against the private autonomy and free market principles guaranteed by the Constitution, and are likely to hinder corporate autonomy and innovation. It also analyzed that in a situation where effective law enforcement on overseas businesses is difficult, such regulations could lead to reverse discrimination by placing excessive burdens only on domestic companies.
Accordingly, the report emphasized that the policy paradigm should shift away from a regulation-centered approach and toward promoting promotion and innovation. In particular, it suggested the necessity of establishing a balanced regulatory system that reflects the dynamic characteristics of the platform industry and the global competitive environment, while establishing support policies to strengthen the global competitiveness of domestic platform companies and enacting a 'promotion law' or 'basic law' that contains a long-term vision and strategy. It also emphasized that rather than blindly copying overseas legislative cases, policies that fit our country's unique economic and social context should be designed, and to this end, they must be supported by sophisticated empirical analysis and thorough on-site investigation.
Startup Alliance Center Director Lee Ki-dae said, “As AI industries have recently been in the spotlight and monopolized investment funds, the irony has arisen that platform industries that are directly related to youth employment and the increase in national welfare are facing difficulties. Now is not the time to discuss regulations, but rather we urgently need to think deeply about how to develop and foster this industry.”
The Startup Alliance Issue Paper is a report that focuses on legal, regulatory, and policy issues related to the startup ecosystem. The full paper can be downloaded for free from the Startup Alliance website.
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