US tech lobby claims Korean regulator fines American firms 5.1 times more than local companies

The Computer & Communications Industry Association has raised fairness concerns over the Korea Fair Trade Commission's regulation of US platform companies, claiming fines imposed on American firms are more than five times those levied on domestic companies.

The Washington-based lobby group also expressed regret over fines recently imposed on Google and Apple by the Korea Communications Commission, and urged Seoul to honor a commitment made by the two countries in November last year to ensure fair digital regulation and stronger procedural protections.

The CCIA held an online media group session Thursday, warning that discriminatory regulation could hinder investment and innovation. The group said differential treatment of US companies by the Fair Trade Commission and other government agencies could fuel trade friction between South Korea and the United States.

The group took particular issue with fines and other penalties that government agencies, including the Fair Trade Commission, have imposed on US companies.

Citing the National Bureau of Asian Research, the CCIA said the Fair Trade Commission "scrutinizes US companies more strictly," adding that "designation criteria, ex ante regulatory obligations and high compliance costs place a burden on US platform companies and could negatively affect seller support services and consumer benefits."

"According to CCIA research, fines imposed on US companies are estimated to be 5.1 times those imposed on Korean companies," the group said, adding that the Fair Trade Commission's rebuttal — that it "enforces the law without regard to corporate nationality" — "does not address the findings of CCIA's analysis."

The CCIA also addressed the Korea Communications Commission's recent decision to impose fines totaling 63.71 billion won ($47.5 million) on Google and Apple over unfair practices including forced in-app payment systems, calling it "the first enforcement action since the amendment of the Telecommunications Business Act in 2021" and "a representative case of regulatory enforcement against US platform companies."

The CCIA particularly noted that "the joint fact sheet agreed upon by South Korea and the United States in November last year contains a commitment to fair digital regulation and stronger procedural protections," and urged both sides to abide by that trade agreement.

The group called for consistent law enforcement and fine decisions regardless of corporate nationality; a move away from legislation targeting only digital platforms in favor of broadly applicable laws; a review of overlapping regulations on platforms and online food delivery services before introducing new rules; and an assessment of whether existing digital regulations and enforcement actions comply with the bilateral trade agreement.

"There are serious concerns about the regulatory environment in Korea," the CCIA said, noting that in the American Chamber of Commerce in Korea's corporate survey this year, 68.8 percent of respondents rated South Korea's regulatory environment as "restrictive" or "very restrictive."