President Lee Jae-myeon of South Korea is making strides to enforce digital regulations akin to those in the EU, which he promised during his campaign. However, some American critics have raised concerns that these laws may impede U.S. technology while giving companies in Beijing an advantage.
The situation became tense after former President Yoon Suk Yeol declared martial law across South Korea in December 2024, leading to his removal from office. Following this, Lee was elected on June 3 and officially took office on June 4, amid worries about how South Korea’s digital regulations might conflict with American interests.
Tami Overby, a noted trade expert and former senior vice president at the U.S. Chamber of Commerce’s Korea Business Council, discussed the escalating tensions between South Korea and the U.S. She pointed out that the average tariff in South Korea is about 0.78%, which is quite low, suggesting that issues related to non-tariff barriers remain significant. The Platform Competition Protection Act (PCPA) draws from EU digital market regulations, which has led to unease among U.S. lawmakers and trade officials.
Some have accused South Korean officials of focusing on American companies while allowing Chinese firms to thrive under the guise of consumer protection. Overby noted that the PCPA subjects American businesses to stricter scrutiny compared to their Chinese counterparts. “We haven’t seen Temu, Aliexpress, or TikTok facing the same level of oversight,” she remarked.
In 2022, the EU introduced the Digital Markets Act (DMA) aiming to enhance competition in the tech sector. However, it has also raised concerns about economic downturns and security vulnerabilities, complicating the broader landscape. This adds a layer of complexity to the conversation around South Korea’s digital regulations.
Representative Carol Miller from West Virginia has voiced worries about how the PCPA might pose national security risks. She emphasized the need for U.S. interests to be defended in trade negotiations, highlighting fears that these regulations might leave American companies exposed.
Overby has extensive experience in U.S.-Asian trade. She expressed her belief that the EU’s regulatory approach could stifle innovation and deter foreign investment—a concern that aligns with apprehensions about the PCPA mimicking the EU’s negative impacts on the digital economy. Miller echoed her sentiments, reflecting on the challenges posed by similar regulations in Europe.
Supporters of the PCPA suggest that it could usher in a new era of competition in Korea’s digital landscape, framing it as a vital antitrust measure to level the playing field for smaller businesses. They argue that South Korea’s distinct market dynamics may enable its regulatory efforts to succeed where the EU has faced difficulties.
Lee has recently participated in the G7 Summit held in Alberta, Canada, advocating for Korea’s digital agenda and expressing an interest in engaging in discussions with the U.S. and Japan on the matter. Miller reiterated that addressing digital priorities like the PCPA is critical for upcoming trade talks.
