The Framework

South Korea is considering a range of interoperability-related regulations that could significantly impact digital platforms, including both ex-ante and ex-post measures.[1] The Partial Amendment Bill to the Monopoly Regulation and Fair Trade Act (MRFTA) proposes designating platforms as “dominant online platform operators” based on factors such as market share and monthly active users. It prohibits practices like self-preferencing, tying, multi-homing restrictions, and most-favored-nation (MFN) clauses—policies that directly affect platform interoperability. While this bill is primarily ex-post, it mirrors key aspects of the EU’s Digital Markets Act (DMA) by preemptively restricting certain business practices for designated firms.

Additionally, South Korea is considering multiple ex-ante regulations aimed at preventing anticompetitive behavior by imposing proactive obligations on large platforms. Though these proposals do not explicitly frame their restrictions as interoperability requirements, their effects would likely be similar—limiting dominant platforms from restricting user choice or preventing smaller firms from competing. Provisions against tying and bundling, as well as data-sharing restrictions, would constrain the scope of services that platforms can offer while potentially compelling them to open access to third parties. While some measures, such as mandated data portability or multi-homing allowances, may enhance consumer choice, others—like blanket prohibitions on self-preferencing—could disrupt common platform practices that benefit users.

Implications for U.S. Technology Companies

The proposed regulations in South Korea could create significant challenges for both U.S. and South Korean tech firms, increasing compliance costs and restricting business models that drive innovation. Many of the rules are designed to curb alleged market abuses but could end up prohibiting standard industry practices that benefit consumers.

Key restrictions, such as limits on self-preferencing and stringent data-sharing requirements, could significantly alter how U.S. tech companies operate in South Korea. The regulations shift the burden of proof onto platforms, requiring them to demonstrate that their business practices are pro-competitive rather than placing the onus on regulators to prove harm. This reversal could create uncertainty and deter innovation. South Korea has also floated the idea of a self-regulatory framework as an alternative, but it remains unclear whether this approach will gain traction or provide meaningful relief for affected companies.

How China Benefits

South Korea’s proposed digital market regulations, similar to those in the EU and UK, could inadvertently benefit Chinese tech firms by restricting U.S. and South Korean competitors. If American and South Korean platforms are constrained in how they leverage data or integrate services, Chinese firms—potentially operating under different regulatory expectations—could expand their market presence. The inability of U.S. companies to engage in common platform strategies could create an opening for Chinese tech giants to offer bundled, integrated services that their regulated competitors cannot.

Moreover, weakening U.S. companies’ competitiveness in South Korea could have broader implications for U.S. influence in global tech markets. If South Korean regulations disproportionately impact American firms, it could strain U.S.-South Korea trade relations and undermine broader efforts to counterbalance China’s growing technological dominance.

Endnotes