DR & AJU Legislation & Government Relations Consulting Center’s latest issue of its specialized legislative journal, the Policy & Business Report, is now available in digital format.
President Yoon finalizes his first parliamentary inspection and “Kakao Blackout” emerges as the hot issue of the National Assembly’s inspection.
Companies should pay special attention to trends related to the Online Platform Fairness Act and the Framework Act on Broadcasting and Communication Development.
The National Assembly’s audit first held after President Yoon’s inauguration came to an end.
The main topic of discussion for the parliamentary audit was about KakaoTalk’s server going down recently. The “Kakao Blackout” incident occurred on the 15th, when a fire broke out at the SK data center, where Kakao’s computer facilities are located. As all Kakao-related services were disturbed by this accident, small business owners in various industries operating their businesses using services such as KakaoTalk and Kakao T suffered great losses.
Later, lawmakers from the ruling and opposition parties scrambled to propose a bill to tighten regulations on data centers. Seoung Lae Jo, a member of the Democratic Party of Korea, Sung Joong Park, and Seung Jae Choi, both members of the People Power Party, proposed the Amendment to the Framework Act on Broadcasting and Communications Development. This amendment includes data center operators and tenants as targets of basic plans for broadcasting and communication disaster management and mandates protection measures for servers, storage devices, and networks.
Additionally, Jae Ill Byun, a member of the Democratic Party of Korea, proposed the Amendment to the Information and Communication Networks Act, which adds data center operators and tenants to subjects of protection measures for the stable operation of information and communication facilities. The amendment also requires reports of current status, causes, measures, restoration measures, etc., to be sent to the Minister of Science and Technology in the event of service suspension.
※ The current status of the proposal for a bill regarding the “Kakao Blackout” incident
| Representative |
Date of Proposal |
Main Contents |
| Amendment to the Framework Act on Broadcasting and Communications Development |
Seoung Lae Jo
(Democratic Party of Korea) |
October 17, 2022 |
Add data centers and value-added telecommunication businesses to major broadcasting communication businesses entities included in the disaster management plan |
Seung Jae Choi
(People Power Party) |
October 17, 2022 |
Include value-added telecommunication businesses that provide servers, storage devices, and networks to broadcasting communication disaster management object |
Sung Joong Park
(People Power Party) |
October 18, 2022 |
Include value-added telecommunication businesses such as Kakao to broadcasting communication disaster management object |
Amendment to the Promotion of Information
and Communication Network Utilization and Information Protection |
Jae Ill Byun
(Democratic Party of Korea) |
October 17, 2022 |
Add data center operators and s managers to the data center protection subject, report to the Minister of Science and Technology causes, countermeasures, etc., in the event of a disaster |
Regarding the Kakao incident, President Yoon commented, “it is a network operated by a private company, but it is no different from a state-based communication network from the public’s perspective.” Thus, the government’s follow-up measures are to be expected.
Furthermore, controversy over the monopolization of online platforms is expected to reappear in connection with this incident. It also seems inevitable that the Act on the Fairness of Online Platform Brokerage Transactions (”Online Platform Act”), currently drifting in conversations of the National Assembly, will become an issue on whether to be enacted.
The Online Platform Act mandates the issuance of standard contracts between online platform operators and sellers registered on platforms and regulates and restricts purchases and management interference with entry companies as unfair trade practices. Discussions began early last year but have continued to idle due to the overlapping issues with the Korea Communications Comsmission and industry opposition to regulatory standards.
On the 21st, the National Audit of the National Policy Committee of the National Assembly highlighted the need to enact the Online Platform Act. Additionally, some lawmakers requested the Fair Trade Commissions to speed up the enactment of the Online Platform Monopoly Review Guidelines and the revision of the Business Combination Review Standards.
“We are preparing to complete the enactment this year of the screening guidelines for abuse of market dominance by online platform operators that consider not only sales but also the number of users and traffic,” Ki-Jeong Han, chairman of the Fair Trade Commission, said in regards to the request. “In order to prevent indiscriminate corporate expansion, we will revise the corporate defect screening standards that fully reflect the characteristics of the platform in relation to mergers and acquisitions (M&A) by early next year.”
The platform industry believes that the Kakao blackout situation and the Online Platform Act are essentially different. The Online Platform Act aims to resolve unfairness arising from the different bargaining power between platform operators and sellers registered on platforms, while service inconvenience due to insufficient data center redundancy is at the core of the Kakao blackout.
The Online Platform Act targets domestic and foreign representative platform companies such as Naver, Kakao, Coupang, Google, Apple, Baemin, and Yanolja. It seems that related companies need to keep an eye on legislative trends due to the butterfly effects caused by the Kakao blackout.
As the first-ever Korean law firm to issue specialized legislative journals, DR & AJU LLC has been publishing the monthly Policy & Business Report since August 2019. The October 2022 issue of the P&B Report conducted a full inspection of legislation proposed to the National Assembly Subcommittee, Standing Committee, and Plenary Session from September 15, 2022, to October 14, 2022, and selected and analyzed legislation with a significant impact on corporate activities. In the case of major legislation, key mentions of legislators, members of the Standing Committee, and government officials are included.
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