In a climate of fervent debate surrounding the proposed ‘Platform Competition Promotion Act’ in South Korea, the Korea Venture Business Association (KVBA) has released survey results indicating significant opposition from the venture community. The Act, announced by the South Korean government in December 2023, seeks to regulate the online platform market by designating key platform companies as “dominant platform operators” and restricting them from engaging in unfair practices within the market.
The survey conducted by the KVBA targeted 230 venture companies, shedding light on prevailing concerns and perspectives regarding the potential implications of the proposed legislation. Released on March 20, the findings revealed that seven out of ten venture companies, constituting 68.7% of respondents, expressed clear opposition to enacting the ‘Platform Act.’
This strong dissent underscores the apprehensions within the venture ecosystem regarding the proposed regulatory framework. A notable aspect is that an earlier survey conducted by Startup Alliance in January 2024 showed that 52.8% of startups had concerns about the Act, fearing negative repercussions on the startup ecosystem. Also, in January 2024, the Korea Venture Business Association had put a solid opposition to the enactment of the Platform Competition Promotion Act by the Fair Trade Commission.
Concerns and Call for Reevaluation
This survey has raised concerns by venture companies about potential consequences and perceived discrepancies in the expected outcomes of the ‘Platform Act’ presented by the Fair Trade Commission. Many respondents expressed skepticism regarding the Act’s purported ability to bolster innovation and competitiveness within the platform industry.
Moreover, there are apprehensions that the proposed legislation could result in excessive governmental intervention in the market economy, hindering the natural evolution of the platform industry. Over 90% of respondents voiced agreement with concerns about potential reverse discrimination against domestic platform companies and adverse impacts on the venture/startup ecosystem.
Additionally, concerns were raised about potential negative effects on the growth of digital-based industries, bureaucratic hurdles resulting from overlapping regulations and a decline in both domestic and foreign investment in platform companies.
Seong Sang-yeop, Chairman of the Venture Business Association said, “As shown in the survey results, if the ‘Platform Act’ is enacted, we are concerned that innovation in Korea’s platform industry and platform companies will shrink, and ventures and startups will lose their growth engines.” He urged for a reconsideration of the regulatory approach, advocating for a business an environment conducive to innovation and growth.
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