South Korean Government Racking Its Brain to Fill Internet Service Market Loopholes

Facebook won a suit against the Korea Communications Commission (KCC) on Aug. 22 and this was because of systemic loopholes. At present, South Korea has no legal grounds to compel global content providers (CPs) to maintain the quality of their communications services or prove the occurrence of user inconvenience. Experts point out systemic improvements will not be easy due to the possibility of conflict with WTO or FTA rules.

After the Seoul Administrative Court’s ruling on the Facebook-KCC case, many are complaining that no one is being held accountable for user inconvenience. Although the court clearly said that an arbitrary change in Internet connection route led to user inconvenience, the court also said CPs cannot be held accountable for communications quality-related problems in the current law, the current law has no stipulated regulations regarding the issue, and such inconveniences need to be proven objectively.

The ball is now in the court of the South Korean government. The government has to revise laws so that a systemic loophole no longer leads to user inconvenience caused by a global CP. The KCC held a meeting on Aug. 23 and expressed its intent to change the status quo.

The Science, ICT, Broadcasting, and Communications Committee of the National Assembly is examining amendments to the same end, too. For instance, lawmaker Kim Kyung-jin submitted an amendment to the Telecommunications Business Act in September last year so that certain global CPs can be compelled to maintain the quality of their communications services and subject to the same regulations as those on South Korean CPs when their overseas activities affect the South Korean market. Likewise, lawmaker Byun Jae-il tabled an amendment to the Act on Promotion of Information and Communications Network Utilization and Information Protection, Etc. in November last year so that certain global CPs can be compelled to install servers in South Korea and fines can be imposed on those refusing to do so.

The thing is, the amendments’ effectiveness is questionable. It will not be easy to collect evidence abroad with regard to foreign CPs negligent in protecting users and the U.S. government may hinder the South Korean government’s restrictions in that most global CPs are located in the United States. In addition, the amendments are targeting CPs generating a certain amount or more of data traffic, and yet they have no obligation to submit their traffic volume data according to the current law.
 

WTO agreements and the KORUS FTA may be violated, too. The WTO states that domestic regulations can be applied to international matters only for the purpose of protecting people’s life and health and public order and manners. The KORUS FTA stipulates no limitation as to American companies’ entrance into the value-added communications service market of South Korea. Forced server installation in South Korea and so on can lead to a trade dispute in which the South Korean government has a slim chance of winning.