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Fact sheet provision lowers barriers for U.S. platforms, but Korean firms may lose competitiveness

Published: 17 Nov. 2025, 16:25

U.S. President Donald Trump speaks during a special dinner hosted in his honor and state leaders by Korea's President Lee Jae Myung at the Hilton Gyeongju hotel in Gyeongju, North Gyeongsang, on Oct. 29. [AFP/YONHAP]

The United States’ push for freer cross-border data transfers and looser platform regulations is emerging as a variable that could shape the future of Korea’s digital regulatory landscape.

While the move may temporarily pause some legislative efforts in Korea, giving local platform operators a brief reprieve, experts warn it could eventually entrench advantages for foreign tech giants and erode the competitiveness of domestic firms.

A Korea-U.S. joint fact sheet released Thursday includes a provision stating that the two countries “ensure that U.S. companies are not discriminated against and do not face unnecessary barriers in terms of laws and policies concerning digital services, including network usage fees and online platform regulations, and to facilitate cross-border transfer of data, including for location, reinsurance, and personal data.”

The explicit mention of digital services has drawn close attention from Korea’s platform industry.

The strengthened U.S. position on removing digital trade barriers could conflict with Korea’s regulatory measures, which have been justified on grounds of national security and personal data protection. Although the fact sheet carries no legal force, it could influence current Korean discussions on imposing network usage fees on big tech firms, the proposed Online Platform Fair Act Law and restrictions on exporting digital map and location data.

“The Korean government and academic circles do not consider these regulations discriminatory, as they apply equally to all firms,” said Lee Hwang, a law professor at Korea University. “But the United States has consistently viewed them as discriminatory, and that perspective is reflected in the wording of the fact sheet.”

Industry observers say the announcement may serve as a chance to recalibrate Korea’s regulatory environment. The proposed Online Platform Fair Act Law — which U.S. trade officials have criticized as a nontariff barrier — may lose momentum.

A civic coalition for the enactment of the Online Platform Fair Act Law holds a press conference in front of the U.S. Embassy in Seoul on July 28, denouncing U.S. trade pressure and urging the passage of the platform regulation bill. [YONHAP]

“There was a bill that would hold platforms responsible for users’ posts, but that legislative drive will likely slow following the fact sheet,” said a platform industry insider who requested anonymity. The temporary easing of the regulatory push offers domestic platform firms a chance to catch their breath.

But longer-term concerns persist. The clause on cross-border data transfers, including location and personal information, is drawing particular scrutiny. One industry official noted that while Korean companies stand to gain little by repatriating data collected abroad, global tech giants could gain significant value from transferring consumer behavior, search and usage data from Korea to the United States — data that serves as a critical asset for developing global services.

While such access could help big tech firms strengthen their competitiveness using Korea as a test bed, it may weaken local companies that have relied on domestic data to build their own edge.

Experts urge caution in interpreting the fact sheet during future legislative processes. Ambiguities could open the door for the United States to accuse Korea of discrimination, potentially leading to even tighter regulations on local firms.

“Korea could find itself in a weaker negotiating position as specific standards are developed,” said Yoo Byung-joon, a business professor at Seoul National University.

“Because regulations apply to both domestic and foreign companies, Korea needs to establish clear standards to avoid reverse discrimination against local firms,” Hanyang University law professor Seon Ji-weon added.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KWEN YU-JIN,OH HYEON-WOO [[email protected]]