Why South Korea Should Resist New Digital Platform Laws

Investment Rating - The report does not provide a specific investment rating for the industry Core Insights - South Korea's proposed digital platform regulations, inspired by the EU's Digital Markets Act, are deemed unnecessary and could harm innovation while benefiting Chinese firms [1][3][4] - The current digital market in South Korea is thriving, with no signs of failure, and existing laws are effectively curbing anticompetitive behavior [2][31] - Proposed reforms may stifle competition and reduce consumer benefits by imposing restrictions on common platform practices [3][86] Summary by Sections Key Takeaways - South Korea's digital markets do not require DMA-style provisions as they are performing well [2] - Proposed regulations could harm innovation and consumer welfare [3][86] Policy Background - The Korean National Assembly is considering multiple digital platform-focused bills aimed at regulating dominant operators and enhancing consumer protection [16][19] Concerns About Digital Markets - The assumption that digital markets require unique regulations is flawed; they are dynamic and competitive without excessive intervention [28][31] Proposed Reforms and Their Implications - Proposed reforms could chill innovation and harm consumer access to valuable services [85][86] - Regulations targeting practices like self-preferencing and tying may overlook their potential consumer benefits [37][44] Recommendations - The report suggests using existing laws to address antitrust issues rather than adopting new, broad regulations [7][8] - A focus on consumer welfare rather than competitor protection is essential for effective competition policy [76][82]