Abstract
Online platform services are characterized by rapid change and mobility based on innovative technologies, so the barrier to market entry is low. In addition, it is difficult to judge market dominance and limiting competitiveness due to the characteristics of a multi-sided market, and multihoming, and the market share is also highly liquid. Therefore, the discipline direction of the online platform market is as follows. First, pre-regulation must be prudent in the sense of respecting the dynamics of the market. Second, as the online platform is related to all industrial areas, legislative imperfections can occur across all areas of the relevant ministries, so over-duplicate regulation of multiple ministries should be avoided. Third, since platform services transact goods and services across national borders, global competition needs to be considered by breaking away from the concept of territorial-based regulation.
However, the online platform regulations currently being promoted by the National Assembly are running counter to this direction of regulation. It presupposes the platform operator as “A” and imposes duties equivalent to those of large-scale distributors, and contains active government intervention and pre-regulatory elements such as contract standardization and compliance with transaction standards. In addition, much of the bill overlaps with the regulations on market dominant abuse and unfair practices in the current Fair Trade Act, and the regulations on prohibited acts in the Telecommunications Business Act.The characteristic of this regulatory bill is that it presupposes that the online platform market is in a “winner-take-all” or service “fixed” state, but this conclusion is not valid. For that reason, first, there is no empirical evidence that there is no stable competition between existing companies, and multihoming is still taking place. Second, technological innovation is being accepted in the market, and its dominant position in the market does not act as a strong entry regulation for the market acceptance of technological innovation. In particular, the multi-sided market and multi-homing, which are the attributes of digital platforms, make the cycle of market dominance shorter and shorter by the acceptance of technological innovation. In light of the nature and status of these markets, it is questionable whether the current online platform market can be viewed as a'winner-take-all' or'fixed' state. In addition, in order for this bill to be effective, the pre-regulations newly established in the Act should also be applied to overseas business operators that provide the same service, but this is also uncertain. In the end, if all the regulations proposed by the bill are applied only to domestic businesses competing with foreign platforms with the same or similar services, only domestic platform companies can be stranded without securing the justification. The promotion of such legislation can cause confusion and disrupt the market, so the implementation of the legislation should be reconsidered.
However, the online platform regulations currently being promoted by the National Assembly are running counter to this direction of regulation. It presupposes the platform operator as “A” and imposes duties equivalent to those of large-scale distributors, and contains active government intervention and pre-regulatory elements such as contract standardization and compliance with transaction standards. In addition, much of the bill overlaps with the regulations on market dominant abuse and unfair practices in the current Fair Trade Act, and the regulations on prohibited acts in the Telecommunications Business Act.The characteristic of this regulatory bill is that it presupposes that the online platform market is in a “winner-take-all” or service “fixed” state, but this conclusion is not valid. For that reason, first, there is no empirical evidence that there is no stable competition between existing companies, and multihoming is still taking place. Second, technological innovation is being accepted in the market, and its dominant position in the market does not act as a strong entry regulation for the market acceptance of technological innovation. In particular, the multi-sided market and multi-homing, which are the attributes of digital platforms, make the cycle of market dominance shorter and shorter by the acceptance of technological innovation. In light of the nature and status of these markets, it is questionable whether the current online platform market can be viewed as a'winner-take-all' or'fixed' state. In addition, in order for this bill to be effective, the pre-regulations newly established in the Act should also be applied to overseas business operators that provide the same service, but this is also uncertain. In the end, if all the regulations proposed by the bill are applied only to domestic businesses competing with foreign platforms with the same or similar services, only domestic platform companies can be stranded without securing the justification. The promotion of such legislation can cause confusion and disrupt the market, so the implementation of the legislation should be reconsidered.
| Translated title of the contribution | A critical review of the online platform regulation bill- Focusing on 「the Bill on Online Platform User Protection」 - |
|---|---|
| Original language | Korean |
| Pages (from-to) | 137-185 |
| Number of pages | 49 |
| Journal | 선진상사법률연구 |
| Issue number | 94 |
| State | Published - 2021 |