U.S. Concerned Proposed Korean Regulations Would Favor Chinese Tech Companies

These regulations which are probably intended to help Korean tech companies at the expense of U.S. companies would also benefit Chinese tech companies as well in Korea:

Fair Trade Commission Chairman Han Ki Jeong, right, speaks with American Chamber of Commerce in Korea Chairman James Kim during a special luncheon event at Grand Hyatt Seoul in this March 2023 file photo. Yonhap

The Yoon Suk Yeol administration’s drive to regulate market-dominant online platforms could be evolving into a potential diplomatic dispute with the U.S., according to industry officials, Thursday.

The U.S. state and commerce departments reportedly raised their concerns regarding South Korea’s proposed regulations. They conveyed these concerns by sending messages to Yoon’s office, the foreign ministry, and the trade ministry late last year.

Although a Fair Trade Commission (FTC) official in charge of the matter said the agency has not received an official comment from Washington, Seoul is said to be trying to persuade the U.S. government by emphasizing that there is no intention of imposing regulations more strictly on foreign firms in favor of domestic companies.

The primary concern for U.S. firms revolves around the potential that the upcoming competition policy rules might inadvertently favor Chinese late movers, like Aliexpress and Temu, which are not expected to be affected by the regulation due to their relatively low market shares.

“It now appears the European Union’s approach is contagious, as Korea’s pro-tech government has tabled a Digital Markets Act-like bill that would unfairly target U.S. platforms while giving Chinese platforms a pass, a policy very much not in U.S. companies’ interests,” the Center for Strategic & International Studies said in a report on Jan. 11. “Korea’s proposed act and the bills under discussion set limits that unfairly target U.S. companies which will, in turn end up helping Chinese companies gain larger market share.”

Korea Times

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