The Framework

South Korea is pursuing multiple regulatory approaches that would impose interoperability-related restrictions on digital platforms. The Partial Amendment Bill to the Monopoly Regulation and Fair Trade Act (MRFTA), introduced in October 2024, would designate platforms as “dominant online platform operators” based on market share and user thresholds.[1] These designated platforms face prohibitions on self-preferencing, tying, multi-homing restrictions, and most-favored-nation clauses—restrictions that fundamentally alter how platforms can integrate services and operate at scale. While positioned as ex-post regulation, the bill’s preemptive restrictions on common business practices mirror the EU’s Digital Markets Act approach. Concurrently, alternative proposals with even lower thresholds circulate in the National Assembly, threatening to expand the regulatory net, while the Ministry of Science and ICT explores a self-regulatory framework through amendments to the Telecommunications Business Act—though this alternative remains largely aspirational.^[2]

Implications for U.S. Technology Companies

The proposed regulations create significant operational burdens that disproportionately impact U.S. technology leaders operating in South Korea. By forcing platforms to unbundle integrated services and restricting standard business practices, these measures divert resources from innovation to compliance while creating operational complexity that advantages smaller competitors. The regulatory uncertainty is compounded by diplomatic tensions, with U.S. Congressional members formally challenging the regulations as discriminatory and the Trump Administration treating such digital regulations as potential trade barriers subject to retaliatory measures.^[3]

More concerning is how these regulations undermine American competitive advantages in the Indo-Pacific region. South Korea’s regulatory paralysis risks excluding it from the next wave of digital innovation while creating opportunities for Chinese platforms that may operate under different standards. As U.S. companies are constrained in how they leverage data or integrate services, Chinese firms—potentially operating under different regulatory expectations—could expand their market presence. This regulatory fragmentation weakens the U.S.-South Korea technology alliance at a critical moment when coordinated approaches to digital governance are essential for countering China’s growing technological influence.

Endnotes