ICT Deregulation
In November the Ministry of Science, ICT and Future Planning came up with plans for deregulation in the local Internet industry in conjunction with 11 government authorities concerned.
The purpose of the first Internet industry deregulation plan is to get rid of restrictions that cause reverse discrimination or shrinkage in industrial activities and address the flaws of the government’s current regulations such as the Real-name Internet System and the Recommendation for Internet Search Improvement. The Real-name Internet System, put in force back in April 2009, has resulted in a collapse of local video websites while anonymity-based YouTube increased its market share in Korea from 2% to 70% during the same period.
Under the circumstances, the ministry collected 51 official opinions in April this year from seven organizations in the industry, including the Korea Internet Corporation Association, the Korea Online Shopping Association, and the Korea Internet & Digital Entertainment Association, and then worked together with the 11 agencies to finalize the plan.
Growth of New Industries Hampered by Excessive Regulations
The Park Geun-hye government is striving to foster the growth of new convergence and ICT-based industries, but various regulations and the lack of systemic support are hindering the efforts. For example, companies in the game and mobile Internet industries are subject to even stricter regulations than before, and the telemedicine and new media sectors are mired in regulations as well.
Restrictions on the game industry have become much more severe since the inauguration of the new government. The Game Addiction Prevention Act, recently sponsored by Saenuri Party lawmaker Shin Eui-jin, stipulates games as a highly addictive substance along with alcohol, drugs, and gambling.
Likewise, the telemedicine industry is showing little growth due to delays in the preparation of legal systems for over 10 years. The current Medical Act bans remote medical examination and treatment of patients by doctors, and thus the popularization of healthcare devices, which are essential for telemedicine, is not easy.
In the meantime, the government regulations have led to reverse discrimination in the mobile application market. Google and Apple are free from the application rating and identification procedure imposed by domestic law, but local markets such as T-Store have to make additional efforts to comply with the restrictions. Besides, a surtax on distributed content is applied only to local application markets, which compromises their profitability.
“The issue of reverse discrimination will continue arising in a variety of sectors, as well as the app market, as more and more foreign companies enter the Korean market,” said SK Planet, adding, “We need at least some balance between the regulations imposed on domestic and foreign companies.”
Experts are pointing out that the government further backs up the new industries by means of new policies and better systems, too. One of the examples is the legal and systemic tools for energy conservation projects using low power consumption technologies, intelligent smart buildings, and smart factories.
The government is moving ahead with deregulation plans for the promotion of the ICT sector, selecting 20 top-priority projects. However, the pace is falling short of expectations of many. “The deregulation efforts appear to be improper because each of the projects is involved with too many organizations and ministries, which makes mutual cooperation and negotiations difficult,” an industry insider explained.