Dealing with digital domination

Lee Kyung-bae
The author is the CEO of Secta9ine.

Our lives start with platforms on our phones and end with them. The alarm in my smartphone wakes me up in the morning with the song I enjoy listening from the music app I frequent. I leave my house after booking a taxi from a cab-hailing platform.

I look up news on a portal platform and videos of interest from a streaming platform during the ride. I link to the office-sharing platform to book a room, and I video conference through the service app. I reserve dinner through a booking platform upon reading the reviews. When I get back home, I open up home-training platform to do my exercise with my personal AI trainer. I watch a film from a streaming platform before I go to sleep. Naturally, I use my smartphone to remote-control to turn off the appliances and light.

All the modern conveniences are run by big software platforms that connect multiple services through a single app. Since a new business can simply be added, businesses sprawl and ever evolve. In the past, a big shopping mall influenced business of shops in the neighborhood. Now an online platform can have nationwide influence.

Calls have risen to contain the sprawling businesses of dominant platform operators. But on there hand, there are concerns that chaining businesses that have become global trends could undermine national competitiveness.

Mobile platforms are not all that bad for general business operators. Comic renting or reading rooms have disappeared with the rise of digital comics. But the digital readership considerably broadened the opportunities for artists, and films based on Korean webtoons have become global hits.

Farmers can directly sell their produces on online platforms without going through middlemen. Those aspiring to work in the media do not have to go through rigorous procedures to join newspaper publishers or broadcasters as they can create their own channels on social media platforms.

Today’s troubles for existing businesses should not be entirely blamed on big platform operators, but are partly due to those who fail to keep abreast with the changes of the times.

So, is there a win-wins solution?

One, platform operators must set a fair price for their services. If fees are too high, the burden on merchants or consumers can increase. They also must pay a fair price for the content and services on which they leverage. If news search is a big reason people log into a certain portal site, the site should pay news publishers.

Two, traditional businesses must change to adapt to the digital environment. If they stick to their ways of the old days while the world is fast changing, they cannot survive. A taxi cooperative in Busan after being challenged by a ride-hailing app fleet opened up its own app charging zero call fees and is now enjoying more than 10,000 calls a day.

Three, governmental assistance is necessary to help local platforms scale up to be global. According to s traffic survey by the Ministry of Science and ICT, Naver had a 2.1 percent share whereas Google dominated with 27.1 percent and Netflix 7.2 percent.
The multinationals however pay far less in taxes or network usage fees compared to local players. Local platforms should not entirely bear criticism and regulation. Internet-based platform operators must be able to become multinational brands like Samsung.

Regulations do not solve everything. Regulations cannot stop a phenomenon. They can only slow the change or cause better resilience. Global platform operators have gone beyond the metaverse to compete in the space. The Red Flag acts of the British in 19th century to regulate motor vehicles to protect carriage operators must not pan out in today’s Korea.