The European Union’s Digital Markets Act (DMA) has lately been a irritant in U.S.-EU relations that nearly derailed trade talks between Washington and Brussels. But like the GDPR before it, the DMA is exhibiting symptoms of the Brussels’ Effect that could increase tensions with non-European as well, according to a report by Tech Policy Press.
In December 2023, the Korean Fair Trade Commission (KFTC) proposed the Platform Competition Promotion Act (PCPA), which was largely modeled on the DMA. Like the DMA, it would impose “ex ante” conduct restrictions on digital platforms that meet certain user and market share thresholds.
The proposal drew the ire of U.S. technology companies, including Meta, Apple, Microsoft, and Google, as well as that of the U.S. Congress, the Chamber of Progress, and the Trump administration, however. In response, the KFTC issued new guidelines in September 2024 that eliminated the ex ante restrictions but retained the thresholds that could subject platforms to penalties of actions deemed to be an “abuse of market dominance.” Those include self-preferencing, exclusive bundling, and refusing to share user or business data with competitors.
Despite the updated guidelines, members of the House Judiciary Committee sent a formal letter to the KFTC last month expressing concern that “the KFTC’s proposed legislation may be used to improperly target U.S. businesses,” a similar complaint the Trump administration has expressed over the DMA. The letter asked for a briefing on the law’s intent and implementation by August 7. At press time, it was unclear whether that briefing had occurred.
“Korea seems poised to follow in Europe’s footsteps, advancing legislation modeled directly on the DMA,” the letter read. The law “would impose prohibitive and overly burdensome regulatory obligations like those contained in the DMA.”
Also like the DMA, the PCPA became embroiled in trade talks between Washington and Seoul. Rep. Carol Miller (R-WV) introduced the U.S.-Republic of Korea Digital Trade Enforcement Act in September 2024 which called for the U.S. to take retaliatory measures should Korea follow through with its proposed regulation. That bill died with the last Congress but in April U.S. Trade Representative Jamison Greer warned the U.S. would not permit “the European Union, or Korea, or any other jurisdiction [to] set the rules for digital trade.”
As with the recent framework trade agreement between the U.S. and EU, however, U.S. concerns over the PCPA were not addressed in the U.S.-Korea agreement reached last month.