South Korea has backed away from a controversial regulation targeting American tech companies after the Trump administration called it discriminatory and warned it would tilt the playing field in favor of China.
The Platform Fair Competition Promotion Act, proposed by South Korea’s Fair Trade Commission (KFTC), would have forced U.S. firms to hand over proprietary algorithms to Seoul regulators while exempting Chinese and domestic competitors. Critics, including Trump’s U.S. Trade Representative Jamieson Grier, warned last year that the plan deliberately excluded Chinese giants that fall below user thresholds while singling out American companies.
On September 3, FTC Chairman Andrew Ferguson confronted South Korean regulators directly at the KFTC’s International Competition Forum in Seoul. “The United States expects fair treatment for its firms,” he said, stressing that foreign governments must not discriminate against U.S. businesses.
The next day, the Korea Times reported that Korea’s nominee for the Fair Trade Commission, Ju Biung-ghi, admitted Ferguson’s remarks influenced the government’s decision to shelve the proposal. “Given the importance of trade negotiations, it is currently difficult to aggressively pursue the platform monopoly regulation act,” Ju said.
President Trump has made confronting discriminatory foreign regulations a cornerstone of his America First trade agenda. In August, he warned on Truth Social that “digital taxes, digital services legislation, and digital markets regulations” unfairly target U.S. companies while giving “a complete pass to China’s largest Tech Companies.”
Ferguson has also put U.S. tech firms on notice, warning that weakening encryption or censoring content to appease foreign governments could violate American law. “Consumers might not want to use a service that exposes them to censorship by foreign powers,” he wrote in a recent letter to companies including Meta, Amazon, Microsoft, and Google.
The setback for South Korea underscores the Trump administration’s willingness to use trade leverage to counter both Chinese influence and anti-American protectionism abroad. The fight, however, is expected to continue as U.S.-Korea trade negotiations move forward.
