Trump Encouraged to Confront South Korea over Tech Regulations Favoring China, Exempting U.S.
In June 2025, South Korea's new President Lee Jae-myung, a liberal, was elected into office. One of President Lee's key priorities is the Platform Competition Promotion Act (PCPA), a regulatory initiative aimed at curbing the dominance of large digital platforms and fostering competition. However, this act has raised concerns in Washington, as it is viewed as an attempt to challenge the U.S.'s "monopoly power" in the tech market.
## Impact on American Tech Companies
The PCPA could significantly impact American tech giants such as Google, Apple, and Meta. These companies may face additional regulatory scrutiny and new compliance requirements, which could limit their business practices or necessitate changes to their market strategies. The PCPA could potentially mandate that these firms share data, open platforms to competitors, or restrict certain types of partnerships that could be interpreted as anti-competitive.
Furthermore, the law may create barriers for new market entrants or expansion projects, potentially stifling innovation or investment by American companies in South Korea’s digital economy. A notable example is the e-commerce giant Coupang, which operates in a globalized marketplace but may not be directly affected by the PCPA in the same way as Google, Apple, or Meta.
## Potential Security Concerns
U.S. officials have raised concerns that the PCPA does not impose similar burdens on Chinese tech firms, potentially exposing sensitive data to potential misuse, espionage, or economic coercion by entities under Chinese government influence. This lack of regulatory parity may allow Chinese tech giants to gain market share and influence in South Korea, potentially undermining the security and autonomy of South Korean digital infrastructure.
There are also fears that Chinese companies, subject to fewer regulatory burdens, could use their platforms for disinformation campaigns or leverage economic power to influence South Korea’s digital policies or business environment.
## Ongoing Negotiations
U.S. President Donald Trump and South Korean President Lee Jae-myung are currently negotiating a deal on tariffs, with the aim of satisfying both countries. The letter from Republican lawmakers, addressed to U.S. Trade Representative Ambassador Jamieson Greer, Treasury Secretary Scott Bessent, and Commerce Secretary Howard Lutnick, warns that the current legislation being considered in Seoul could advance the interests of the Chinese Communist Party by exempting major Chinese digital giants like ByteDance, Alibaba, and Temu.
The letter applauds ongoing efforts to secure a trade agreement and circumvent tariffs set to be reinstated on July 8. However, details of these negotiations remain unclear, and a White House spokesperson has stated that Trump will confirm whether he will grant any extensions next week.
In response to these concerns, Rep. Carol Miller re-introduced legislation to protect American companies in South Korea last month. The letter, led by Rep. Adrian Smith and Rep. Carol Miller, warns that the PCPA could increase threats related to data security, disinformation, economic coercion, and espionage stemming from the Chinese Communist Party's influence over Chinese tech giants.
In conclusion, the PCPA is intended to promote competition but could disproportionately affect American tech companies through increased regulation and compliance costs. Security concerns arise from the perception that Chinese tech companies may not face the same regulatory burdens, potentially increasing risks related to data security, espionage, and economic coercion. Ongoing discussions between the U.S. and South Korea reflect tensions over balancing competition policy with national security interests.
The PCPA's potential effects extend beyond South Korea's digital economy, as it could significantly impact American tech giants like Google, Apple, and Meta, who may face additional regulations and compliance requirements, potentially altering their market strategies. Moreover, the law's implications for the economy and politics are far-reaching; it could lead to discussions about the balance between competition policy and national security interests in both countries.
