Preparing Joint Countermeasures
The South Korean government and the National Assembly have decided to work together on Google which dominates more than 70 percent of domestic streaming video traffic but refuses to pay net fees. Not only the government’s competent authorities, such as the Ministry of Science, Future Planning and ICT (MSIP) and the Korea Communications Commission (KCC), but also the relevant authorities, including the Ministry of Strategy and Finance (MSF), the Korea Fair Trade Commission (KFTC) and the National Tax Service (NTS) will jointly come up with countermeasures.
The comprehensive inspection of the MSIP and the KCC held in the National Assembly for two days from September 30 to 31 discussed reverse discrimination against domestic internet service providers, such as Naver and Kakao, between foreign companies, including Google and Facebook.
The ruling Minjoo Party lawmaker Yoo Seung-hee mentioned about net fees paid by Internet service providers to communication service providers, saying, “Domestic service providers like Naver and Kakao pay tens of billions of won of net fees but Google and Facebook doesn’t pay at all. While domestic companies have decided not to provide high-definition video services due to mounting net fees and are losing the competitiveness, foreign companies are expanding their traffics mainly due to video services. In fact, the traffic of Facebook has increased by 10 times in the past four years but that of domestic firms has grown by five times. The government needs to come up with measures to address such reverse discrimination.”
People's Party lawmaker Oh Se-jung also said, “Global Internet service providers are not under regulation so there are concerns that only domestic providers can be discriminated. The government should revise the Telecommunications Business Act so that value-added telecommunications service providers at home and abroad can get the competition situation.”
Oh specifically asked Google Korea CEO John Lee and Facebook Korea CEO Cho Yong-bum, “Are you willing to cooperate when the government evaluate the competition situation by law?” In this regard, Google and Facebook show a slight different stance. Facebook Korea CEO Cho Yong-bum said, “We are doing best to abide by the Korean law. When it becomes legalized, we will faithfully follow the law.” However, Google Korea CEO John Lee said, “We obey the local law in the global market but we have a standard based on California law to adopt the same approach as a global service provider.”
Compared to foreign companies, domestic businesses face reverse discrimination. In order to regulate it, however, comprehensive measures in all directions ranging from registration to administration and taxation are required. Accordingly, there has been increasing public consensus that the government and the National Assembly should take a joint measure.
Minister Yoo Young-min of the MSIP said, “I agree with that domestic companies should not be reversely discriminated. It is hard to apply the domestic law to global companies’ business conduct as well as taxation. So, we will work with the KFTC, the MSF and the NTS to come up with measures.”
The KCC took the same stance. KCC Chairman Lee Hyo-sung said, “We are currently investigating Facebook rooting the access path. We will not only examine the facts but also see reasonable traffic management by and large. Then, we will cooperate to come up with measures to address reverse discrimination against domestic firms.”
Kim Kyung-jin of the minor opposition People's Party also said, “If the government propose an alternative after conducting a lot of research, including foreign cases, the National Assembly will also make an effort to legislate the law.”