Digital Regulation Is No Longer Just Domestic Policy as Korea and US Clash Over New Law

South Korea has introduced the Platform Competition Promotion Act, a legislative proposal focused on regulating dominant digital platforms through ex ante obligations. The bill draws conceptual structure from the European Union’s Digital Markets Act, which assigns mandatory duties to firms with entrenched market positions in areas such as search, advertising, and app distribution. Korea’s draft legislation applies similar logic to platforms that meet defined thresholds of user concentration, data leverage, and intermediation power. These concepts draw from the European Union’s Digital Markets Act, which targets gatekeepers based on entrenched market position, control over user data, and their role as essential intermediaries between businesses and users.

If passed, platforms that meet the law’s thresholds would be subject to conduct restrictions intended to curb anti-competitive behavior. These include prohibitions on self-preferencing, exclusive bundling, and refusal to share user or business data. Importantly, the law introduces new legal categories that apply to firms prior to any formal finding of abuse, establishing obligations through structural designation rather than case-by-case enforcement. Some legal scholars have argued that the categories are likely to apply to US-based firms such as Google, Apple, Amazon, and Meta, due to their scale and commercial integration in Korea. Others, particularly from industry, have argued that the legislation creates structural disadvantages for US firms and risks being used as a trade barrier under the guise of competition policy.

On July 24, six members of the US House Judiciary Committee sent a formal letter to Korea’s Fair Trade Commission raising concerns about the bill’s regulatory intent and implementation structure. The lawmakers argued that the bill unfairly targets US tech companies while giving Korean and regional competitors a pass. They also criticized the bill for trying to copy the EU approach, and the committee warned that the proposal puts at risk the broader economic and strategic cooperation between the two countries. The letter further requested a briefing by August 7, 2025, to explain how Korea plans to choose which platforms will be regulated, what the economic impact might be, and the legal rationale for applying obligations to foreign firms operating in Korea.

This request came shortly after bilateral trade talks, where digital competition policy was likely a key topic, suggesting US lawmakers view the issue as part of a larger trade and diplomatic conversation. The broader pattern suggests that digital governance and regulation are no longer confined to domestic rulemaking. When new laws could affect US tech companies, legislative proposals must now be evaluated through diplomatic channels, not just by regulators. In Korea’s case, what began as a national effort to improve competition in digital markets has triggered a foreign policy response from a key ally. The outcome may set an early precedent for how states handle legal conflicts with the Trump Administration over US digital platforms that operate across borders.

The Platform Competition Promotion Act marks a major shift in how South Korea approaches digital platform regulation. Korean antitrust enforcement, grounded in the Monopoly Regulation and Fair Trade Act (MRFTA), has mostly followed a traditional ex post model. That means regulators step in only after a company has violated the rules, similar to the approach in the US, where the enforcement model stresses case-by-case analysis through judicial or administrative proceedings. The new proposal changes that by adopting an ex ante approach, assigning obligations to platforms before any formal finding of abuse or dominance. This model draws directly from the European Union’s Digital Markets Act, which identifies gatekeepers in advance and applies broad rules to them based on their size and market role.

The EU’s model has sparked international debate, particularly as countries across Asia and Latin America adopt similar frameworks. Critics warn that this trend risks creating a de facto regulatory perimeter shaped by European standards, with long-term implications for global digital governance.

Other countries are also moving in a similar direction. India’s Digital Competition Bill proposes ex ante rules for large platforms based on similar thresholds and behavioral obligations. In Japan, the government has already adopted the Transparency and Fairness of Digital Platforms Act (TFDPA), which requires major online platforms to follow certain disclosure and procedural obligations.

Brazil’s draft legislation, though currently stalled, imposes conduct restrictions on dominant digital platforms and borrows structural elements from the European Union’s Digital Markets Act and OECD competition frameworks. Even so, more recent legal and regulatory developments are impacting US tech firms operating in Brazil. In July 2025, the US imposed tariffs and Magnitsky Act sanctions on Brazil following court‑led platform accountability measures, escalating tensions over digital regulation into a broader diplomatic dispute.

The US has also increasingly taken a similar approach with Western democracies, as Canada reportedly delayed enforcement of a proposed digital services tax amid threats from President Trump to cut off trade negotiations. This isn’t the only example of the Trump Administration treating digital regulations as potential trade barriers and deploying retaliatory tools, including tariffs, visa restrictions, and public accusations of censorship, to challenge foreign enforcement efforts.

These interventions suggest an emerging pattern, with the US increasingly interpreting regulatory efforts directed at its global platforms as acts with trade implications. American firms, especially in the technology sector, are now viewed as strategic economic assets. When foreign laws affect how these companies operate or impact revenues, the US is now using trade tools, rather than competition law. This convergence of domestic regulation and trade interests is creating a new category of cross-border tension. What may appear to be advocacy for fair market rules on the surface increasingly serves as a proxy for geopolitical positioning.

The disagreement between Korea and the United States reveals a deeper challenge in digital governance. Even among long-term democratic allies with shared strategic goals, legal systems diverge in their approaches to the same platforms. Korea’s move toward ex ante regulation mirrors similar efforts in the EU, India, and Japan, yet the backlash from US lawmakers suggests that countries now face implicit choices. Aligning with European-style or other interventionist platform regulation may expose them to diplomatic friction or economic countermeasures when US tech firms are directly affected.

In the emerging global order, platform regulation serves as both economic policy and a signal of geopolitical alignment. Regulatory proposals, even when rooted in domestic priorities, are increasingly viewed as expressions of strategic intent, particularly when they impact powerful foreign firms. While legal systems provide the procedural framework, the consequences of regulation unfold within broader diplomatic and commercial arenas. For middle powers like Korea, efforts to govern digital markets intersect with the pressures of alliance politics, making them vulnerable to economic pressure in response to national decisions. Regulation, once considered a matter of sovereign discretion, now demands strategic calibration.