In a tense meeting room last month in Brussels, U.S. trade negotiators leaned forward and delivered a pointed warning to their European counterparts: “Europe’s digital rules? They’re on the table—if the EU digs in, your exports face consequences.”
South Korea now stands on the same precipice.
By advancing the proposed Online Platform Monopoly Act (OPMA) and reforms to the Monopoly Regulation and Fair Trade Act (MRFTA)—both inspired by the EU’s Digital Markets Act—as well as the Online Platform Intermediary Transaction Fairness Act (OPITFA), a business-to-partner (B2P) bill aimed at capping platform-intermediary commissions, Seoul risks not only hamstringing its digital ecosystem, but also drawing the ire of a U.S. administration determined to shield its tech champions.
Skeptics have long contended that the case for imposing a regulatory straitjacket on large digital firms rests on shaky empirical and ideological foundations. There is no genuine consensus that digital markets are especially prone to anticompetitive conduct, nor is there agreement on the need for ex-ante competition rules tailored to the sector. On the contrary, these markets are often characterized by rapid innovation, substantial R&D investment, and fierce rivalry. Moreover, the firms targeted by such rules are highly diverse, undermining the simplistic narrative that they warrant uniform regulation.
Despite promises of boosting competition and consumer choice, the DMA is already showing signs of backfiring. Direct hotel bookings in Europe have reportedly dropped by 30%, with traffic shifting to large intermediaries that charge higher fees. Meanwhile, innovative features and AI tools from Apple, Meta, and Google have been delayed or withheld in the EU, citing security concerns and regulatory uncertainty tied to the DMA’s interoperability and self-preferencing rules.
A recent report highlights the EU’s degraded consumer experience: more fragmentation, less-intuitive interfaces, and heightened privacy and security risks. Estimates of DMA-related losses range from €8.5 to €114 billion. The EU may be willing to take those losses because the DMA is an industrial-policy tool intended to hobble successful U.S. tech companies and give a leg up to European competitors and complementors. Indeed, the DMA’s “gatekeeper” designation under the DMA appears to have been reverse-engineered to capture mostly U.S.-based firms.
As French President Emmanuel Macron put it:
If we want technological sovereignty, we’ll have to adapt our competition law, which has perhaps been too much focused solely on the consumer and not enough on defending European champions.
South Korea’s proposed OPMA and proposed reforms to the MRFTA risk importing this flawed model. While the Korea Fair Trade Commission (KFTC) insists that these regulations are not intended to target foreign companies, the criteria—such as global market-share thresholds—disproportionately affect U.S. firms like Google, Apple, and even Coupang. OPITFA, which is ostensibly aimed at delivery services, would nevertheless also capture these U.S. tech firms. The coincidence has not gone unnoticed in Washington.
President Donald Trump’s administration has explicitly warned it will consider “responsive actions like tariffs to combat the digital service taxes (DSTs), fines, practices, and policies that foreign governments levy on American companies.” The DMA was specifically cited as an instance of these DSTs, which the administration characterized as “extortion” and “exploitation” of American companies.
U.S. Trade Rep. Jamieson Greer has declared that the United States will not allow other jurisdictions—including Korea—to “set the rules for digital trade” or treat U.S. companies “more restrictively compared to domestic—and Chinese—companies.”
Moreover, congressional leaders have introduced resolutions opposing South Korea’s digital-regulation plans and calling for retaliatory measures. There is real concern in Washington that passage of Korea’s OPMA and the MRFTA reforms could trigger a “domino effect,” encouraging other Asian countries to adopt similar measures targeting American tech firms. Recently, U.S. Rep. Scott Fitzgerald (R-Wis.) introduced legislation that would declare U.S. companies independent from burdensome foreign regulations, especially the DMA.
Policymakers must come to terms with the stark reality that if you live by the sword of politics, you will die by the sword of politics. If South Korea proceeds with regulation perceived to unfairly target U.S. tech firms, it risks not only retaliatory trade measures, but broader damage to the U.S.–Korea economic relationship at a time when cooperation is crucial—on security, AI governance, and supply chains.
South Korea boasts a vibrant tech ecosystem, with successful domestic firms in search, messaging, and e-commerce. It should nurture this dynamism through policies that reward merit-based competition, not through government-designed rules that impose rigid templates on business models and interfaces. The nation should resist being swept into an illusory consensus that sacrifices consumer welfare and homegrown innovation in pursuit of vague ideals like “fairness.”
South Korea can protect consumers and promote innovation without surrendering to a politicized, anti-growth regulatory impulse imported from Brussels. The time for Seoul to pivot decisively away from a self-defeating regulatory path is now.
