The Korean Government Should Keep Its Word and Push Against the Misleading “Fairness Act”
The United States and South Korea released a joint fact sheet last week outlining their trade relations. The agreement moves in the right direction regarding digital issues, as it eliminates non-tariff barriers such as network usage fees and online platform regulations, as well as facilitates cross-border data transfers, including location data, reinsurance data, and personal data. Now, the Korean government must turn these announcements into reality. The first step should be explicitly stopping all efforts to push the misleadingly named “Fairness Act.”
The Korean National Assembly has consistently pushed for new regulatory measures targeting online platforms. The “Fairness Act,” modeled under the EU’s Digital Markets Act, seeks to impose discretionary, non-market regulations to incentivize less competitive digital companies to gain market share artificially. ITIF has previously outlined why the “Fairness Act” is problematic and ultimately a bad policy. First, the new legislation would grant KFTC a broad discretion to pre-designate and target companies with a “superior bargaining position” based on arbitrary thresholds, opening the door to target U.S. companies investing in South Korea. Second, it proposes distortive limits on platform commissions and bans perceived “discriminatory” transaction terms, penalizing the most productive digital companies and putting the finger on the scale against precisely those companies that invest and innovate to improve their service delivery.
The deal announced by the U.S. and South Korean governments should mark the end of such non-market, discriminatory measures against American companies. The joint statement explicitly commits South Korea to “provide additional procedural fairness provisions in competition proceedings.” The agreement also commits to ensuring that “U.S. companies are not discriminated against and do not face unnecessary barriers in terms of laws and policies concerning digital services.” In other words, this deal should effectively end all forms of online platform legislation and disproportionate competition enforcement in South Korea.
South Korean policymakers should take the agreement with the United States seriously and avoid circumventing it or seeking loopholes. Doing so could backfire, becoming one of the most serious irritants in U.S.-Korea relations. Some reports suggest the Trump administration might retaliate with tariffs and Section 301 investigations if Seoul fails to meet its digital trade commitments. Despite this, some Korean officials continue to push DMA-style laws targeting online platforms. Members of the National Assembly and KFTC officials argue that advocating for the “Fairness Act” does not violate the U.S.-South Korea agreement. They are misleading the public, as the proposal they are advancing would open the door to arbitrary and discriminatory treatment of U.S. companies.
Korea’s over-regulation and interventionist approach in the digital economy is clearly a concern for U.S. trade negotiators. It is important to understand American priorities to rebalance trade and economic relations. U.S. policymakers have been increasingly concerned about Non-Tariff Attacks—how discriminatory regulations and taxes with arbitrary thresholds are targeting American companies all over the world.
For Seoul, it should be clear: passing the “Fairness Act” means violating the trade deal with the United States. The U.S. government has announced many trade and investment deals over the last few weeks. Yet the language in the joint statement with South Korea is the most specific and explicit on U.S. concerns about platform regulations and procedural fairness in competition enforcement proceedings.
South Korea has an opportunity to show it is serious about aligning with the commitments it just made with the United States. The joint statement was unusually direct about eliminating non-tariff digital barriers and strengthening procedural fairness in competition enforcement. That clarity should guide Seoul’s next steps. Korea’s digital economy performs best when firms compete on productivity and technology, not when policymakers tilt the playing field or hard-code advantages based on size. A shift from protection to growth—letting competitive small firms scale and larger firms keep investing—is what ultimately supports a healthier ecosystem.
The “Fairness Act” would move in the opposite direction. It layers discretionary obligations on the most innovative firms, introduces unpredictable enforcement risks, and weakens the companies that anchor Korea’s global competitiveness.
If Korea wants to secure investment, preserve trust with U.S. partners, and sustain long-term productivity growth, it needs clear actions. The joint statement is a starting point, not a finish line. Seoul should step back from the “Fairness Act” and move toward a size-neutral, predictable regulatory approach that rewards innovation over intervention.
