Post-Regulation Enforcement More Rational Than European-Style Preemptive Platform Regulation

The online platform regulation bill that was introduced in the National Assembly and even considered for fast-track designation was modeled after the European Union’s Digital Markets Act (DMA). Under this approach, companies above a certain size are pre-designated as “dominant platforms,” and practices such as self-preferencing, tying, restrictions on multihoming, and most-favored-nation (MFN) clauses are, in principle, prohibited. However, applying this framework wholesale to Korea ignores fundamental differences in market realities and industrial structure.

Although discussions on a platform monopoly regulation law have temporarily stalled due to the impact of Korea–U.S. trade negotiations, political interest in online platform regulation remains strong. As a result, the possibility of renewed legislative efforts remains high. Precisely for this reason, greater caution is needed at this stage, as premature ex ante regulation could impose long-term burdens on the industry.

Unlike Europe, Korea’s platform market is not dominated by U.S. Big Tech firms. Domestic companies such as Naver, Kakao, and Coupang divide key services among themselves and compete intensely. Introducing European-style ex ante regulation in this environment risks creating reverse discrimination, whereby foreign firms evade regulatory scrutiny while domestic firms alone are subjected to heavy regulatory constraints.

It is also risky to assess platform power solely on the basis of market share. Platforms operate in two-sided markets that connect suppliers (producers) and consumers. In such structures, platforms often charge lower fees to sellers in order to attract more consumers. As a result, a high market share does not automatically translate into strong market dominance.

Moreover, the practices targeted by regulation do not always restrict competition or harm consumers. Self-preferencing can, in some cases, lower prices and increase consumer benefits, while tying can offer bundled services that are cheaper and more convenient.

There can also be positive effects on competition. Self-preferencing and service bundling can differentiate platforms and intensify inter-platform competition, while restrictions on multihoming or MFN clauses may, in certain contexts, encourage investment and competition over service quality. Ignoring these realities and imposing blanket legal prohibitions risks weakening competition itself.

Shifting the burden of proof onto firms is another serious concern. Under normal principles, it is the government—specifically the Fair Trade Commission—that must prove anticompetitive conduct. However, the proposed ex ante regulatory framework demands that firms themselves demonstrate the absence of anticompetitive effects. This runs counter to the presumption of innocence and may push companies toward defensive and risk-averse management, ultimately stifling innovation. If firms fear regulatory sanctions every time they attempt a new service or feature, innovation will slow, and consumer welfare will suffer.

Ultimately, Korea should not simply import Europe’s ex ante regulatory model. With existing legal frameworks such as the Fair Trade Act and the E-Commerce Act already in place, a more reasonable approach is to impose ex post sanctions only when clear problems arise. Above all, this is the moment to establish governance structures that allow consumers to participate institutionally in the regulatory design process.

Ho-kyung Lee
Research Fellow, The Center for Free Enterprise

Korean version: https://www.cfe.org/bbs/bbsDetail.php?cid=press&pn=2&idx=28105