Korea’s Digital Gamble: Will New Tech Rules Hurt Innovation and Help China?
South Korea is on the verge of making a costly mistake by copying Europe’s flawed digital competition rules, which misinterpret how online markets function. These proposed regulations would harm Korea's economy and consumers’ online experience.
Even worse, as Robert Atkinson writes for The Korea Herald, by unfairly penalizing large American technology companies, these policies could provoke President Trump—who is already looking for reasons to impose tariffs on adversaries and allies.
Korea’s Parliament is pushing the Platform Competition Promotion Act (PCPA), modeled after the EU’s Digital Markets Act (DMA), while the Fair Trade Commission (KFTC) is considering similar changes to its competition regulations. Among other things, these reforms would restrict how platforms rank search results, display products, and integrate services.
But as Atkinson explains, rather than making markets more competitive, Europe’s DMA has already caused unexpected problems—harming users, slowing growth, and driving startups elsewhere. Korea should watch how the DMA unfolds before adopting similar measures, ensuring a smarter approach that protects innovation, competition, and national security.
Atkinson also points out that while the PCPA and KFTC’s adjustments would burden U.S. and Korean firms through increased costs and restrictions on their business practices, Chinese companies would largely escape scrutiny. This would give Chinese firms an advantage, allowing them to expand in Korea and strengthen their foothold in AI, cloud computing, and e-commerce.
Finally, Atkinson warns that Korea's pending regulations aren't just a techno-economic issue but a diplomatic one. The mere prospect of these measures is already straining U.S.-Korea trade ties, prompting Congresswoman Carol Miller (R-WV) to introduce the U.S.-Republic of Korea Digital Trade Enforcement Act. If Korea moves forward, it could be a red flag for the Trump administration, which sees unfair treatment of U.S. companies as a threat.
By copying the EU's DMA and targeting U.S. technology leaders, Korea risks "poking the bear" and would be wise to do otherwise.
