South Korean Government to Revise Its The Telecommunications Business Act

Jun 18, 2017

A bill that will require global IT companies such as Google, Facebook, and Blizzard to publicize information on their management activities in South Korea is set to be motioned in order to resolve ‘blind spot of information’ and to guarantee fair competitions. In a long term, it is likely that this bill will bring in ‘Google tax’, which is a controversy in global markets, early.
Oh Sae-jung, who is a member of The People’s Party, is going to be the representative to submit ‘Partial Revision Legislative Bill of The Telecommunications Business Act’ that has such information as the main point on the 19th. This bill requires evaluations to be carried out on competitions regarding value-added telecommunications businesses that manage internet businesses and minister of Ministry of Science, ICP and Future Planning to require these businesses to submit data and materials. Current law is regulated so that evaluations are carried out within key telecommunication business and not value-added business. This law will be implemented after 6 months is passed from the time it is proclaimed.
This revised bill is likely to become a legal basis that will require value-added telecommunications businesses to submit data and materials in order to evaluate competition status. When this bill is passed, global IT companies such as Google, Apple, Facebook, and Blizzard need to publicize their data through South Korean limited liability companies. Oh Sae-jung’s belief is that this will create environment for fair competitions based on accurate present conditions. It is also expected that will become a help in establishing policies that will protect users within internet services that have become an oligopoly by large companies.
Especially it will be possible to under information regarding global ICT (Information Communication Technology) companies and to establish accurate policies. Although global ICT Companies have enormous amount of influence in South Korea, they entered South Korean market as limited liability companies. Legally limited liability companies do not have to announce their sales publicly or go through external audit. Even when South Korean Government or National Assembly requested data and materials from them during a process of establishing policies, they could not receive almost any data or materials from these ICT companies.
“Although percentage of foreign services such as Google and Facebook is significant in South Korea, we have had difficulties in establishing policies since we do not have any data or materials from them for us to understand current market situation.” said Oh Sae-jung. “We need to revise The Telecommunications Business Act in order to accurately evaluate competitions.”
This revised plan does not clearly state detailed standards for selecting companies. Selections will be made by South Korean President based on market shares and others. Considering size of sales and influence on South Korean market, most of large ICT Companies such as Google, Apple, Facebook, Blizzard, and Netflix that have corporate in South Korea will be subjects to this revised plan. Revised plan maintains regulations that are clearly stated on current laws and will impose fine of less than $8,827 (10 million KRW) to businesses that do not submit data or materials or submit false data or materials.
Some predict that this revised plan will continue as a discussion for ‘Google tax’. Currently Europe and Indonesia are working to levy taxes on global companies that correspond to how much they make in sales. “Considering fairness and system of current laws, we did not give any changes to level of penalties.” said a representative for Oh Sae-jung’s office. “Because there is a chance that there will be additional discussions about regulations when there are continuous incidences of violations, this will become a foundation for creating an environment for fair competitions.”
Staff Reporter Oh, Daeseok | ods@etnews.com

■Summary of revised plan of The  Telecommunications Business Act motioned by Oh Sae-jung who is a member of The People's Party
▲Representative for this motion: Oh Sae-jung who is a member of The People's Party
▲Date of motion: 6/19/17
▲Main information:  Minister of Ministry of Science, ICP and Future Planning to request data and materials from value-added telecommunications businesses when evaluating competitions
▲Main targets (prediction): South Korean and foreign value-added telecommunications businesses (Google, Facebook, Blizzard, Netflix, Naver, and Kakao) <■Summary of revised plan of The Telecommunications Business Act motioned by Oh Sae-jung who is a member of The People's Party ▲Representative for this motion: Oh Sae-jung who is a member of The People's Party ▲Date of motion: 6/19/17 ▲Main information: Minister of Ministry of Science, ICP and Future Planning to request data and materials from value-added telecommunications businesses when evaluating competitions ▲Main targets (prediction): South Korean and foreign value-added telecommunications businesses (Google, Facebook, Blizzard, Netflix, Naver, and Kakao)>

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