KFTC Chief Blazes the Trail in Digital Economy Regulation

Jo Seong-uk shifted focus from chaebol reform to digital economy regulation.

KFTC Chief Blazes the Trail in Digital Economy Regulation

Photo: the Fair Trade Commission.  Credit: Fair Trade Commission.

The Fair Trade Commission (KFTC) 공정거래위원회, South Korea’s main antitrust regulator, is among the world’s most active regulators against anti-competitive conduct. Much of its attention has been focused on regulating chaebol 재벌, South Korea’s mega-conglomerates such as Samsung 삼성 that exercise an outsized influence on Korea’s political economy. (See previous coverage, “How Samsung Sprung its Leader from Prison.”) But under the leadership of Jo Seong-uk 조성욱, KFTC’s emphasis shifted significantly toward regulating the digital economy.

In the two years since taking office in September 2019 as the Moon Jae-in 문재인 administration’s second KFTC head, Jo has built an impressive track record on regulating the online economy. Highlights include: a KRW 100b (USD 85.4m) penalty against Apple for shifting the cost of repairs and advertisement to the telecom companies of South Korea that sold Apple’s iPhones; pushing Netflix and other streaming services to give a full refund to customers who quit during the monthly billing cycle; a KRW 26.7b (USD 22.8m) penalty against Naver 네이버 for manipulating its algorithm to favor its own products and content in web searches; and the revised Telecommunication Act 전기통신사업법 that made South Korea the first country in the world to prohibit an app market operator to compel a specific mode of payment.

Next on Jo’s to-do list is the proposed Online Platform Fairness Act 온라인플랫폼공정화법, a comprehensive legislation that would regulate anti-competitive behaviors of major online platforms such as Naver, Kakao 카카오 and Coupang 쿠팡. The proposed law would standardize contracts between the platforms and the merchants and customers who use the platforms, and prohibit the platforms from leveraging their dominant position to extract unfair advantage.

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