Correction of Reverse Discrimination?
The heads of Google and Facebook have been chosen as a witness for the National Assembly's audit this year which will begin right after the Chuseok holidays, attracting public attention. They are expected to be questioned by lawmakers of the ruling and opposition parties over the issues like tax evasion and net fees in South Korea.
In addition, a new bill that imposes similar levels of regulations with domestic mobile carriers on Google and Facebook will be proposed after the Chuseok holidays. The so-called Information and Communication Technology (ICT) New Normal Act includes not only domestic but also foreign Internet service providers as a subject to regulations. This is why all eyes are on whether the new bill will be able to address reverse discrimination against domestic companies which have continuously been pointed out in the industry.
According to related industry sources on October 8, the Science, ICT, Future Planning, Broadcasting & Communications Committee of the National Assembly selected Facebook Korea CEO Cho Yong-bum and Google Korea CEO John Lee as a witness for the National Assembly's Science, ICT, Future Planning, Broadcasting & Communications audit to be held on the 12th. Park Dae-sung, vice president of Facebook Korea, and Lim Jae-hyun, managing director of Google Korea, were also chosen as a witness for the National Assembly’s audit to take place the next day.
Google and Facebook are expected to be bombarded with questions about reverse discrimination at the National Assembly’s audit this year. Google is also facing allegations about tax evasion in South Korea, though the company rang up 2 trillion won (US$1.74 billion) in sales in the domestic market. Google will also be questioned over Google application pre-installation and obscene contents posted on YouTube run by Google.
Facebook will be also asked about net fees to communication service providers as one of the issues related to reverse discrimination. Facebook asked SK Broadband to use the network for free last year but rerouted its access server after the two companies failed to reach an agreement. Accordingly, Facebook users had trouble connecting to the website. Currently, the state-run Korea Telecommunications Commission (KCC) is conducting the investigation but hasn't reached any clear conclusions.
Although the heads of Google Korea and Facebook Korea were selected as a witness for the National Assembly’s audit, it is still unclear that they will attend it. Domestic conglomerates’ CEOs have been frequently chosen as a witness for the National Assembly inspection but their representatives have attended the audit citing various reasons. The same is true of Google and Facebook. No one will be able to come up with clear measures against thorny issues like reverse discrimination unless he or she is an executive from the headquarters. Even when the CEOs attend the inspection, they are highly likely to provide limited answers.
The National Assembly and the government are also making move to impose regulations on Google and Facebook. Kim Sung-tae from the Liberty Korea Party is planning to propose the ICT New Normal Act immediately after the end of the Chuseok holidays. It is the revised bill of the Telecommunications Business Act and the Basic Act for the Development of Broadcasting and Communications.
The revised bill will apply duties of competition assessment, accounting and statistical reports, which are required for key telecommunications service providers such as KT, SK Telecom and LG U+, to value added common carriers as well. In particular, it will include foreign Internet service operators including Google and Facebook as a subject to regulations. Kim said, “We will address reverse discrimination problems by applying the New Normal Act to foreign Internet service providers. We will put restrictions on them even through international cooperation systems if needed.”
The government is running a pan-governmental task force (TF) team. The TF will investigate and come up with measures to address issues related to reverse discrimination against Internet service operators such as tax evasion, network fees and personal information protection.
An official from the industry said, “During the National Assembly's audit this year, Google and Facebook will be intensely questioned by lawmakers of the ruling and opposition parties over the various reverse discrimination issues like tax evasion and obscene contents. We hope that reverse discrimination problems can be settled soon through the National Assembly inspection, the new revised law and the government’s TF.”