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USTR takes issue again with S. Korean bills on network usage fees

April 2, 2024 - 09:12 By Yonhap
2024 National Trade Estimate Report on Foreign Trade Barriers (US Trade Representative)

The Office of the US Trade Representative has taken issue again with South Korean bills calling on foreign online content providers to pay network usage fees in a recent report, saying they could be "anticompetitive."

On Friday, the office issued the 2024 National Trade Estimate Report on Foreign Trade Barriers, where it touched on the bills that have been pending at the National Assembly. US streaming giant Netflix and other foreign content providers could be subject to the fees in question should the bills be passed.

"Since 2021, a number of bills have been introduced in the National Assembly that would require foreign content providers to pay network usage fees to Korean Internet service providers," the report reads.

"Korean ISPs are also themselves content providers, fees paid by US content providers could benefit a Korean competitor. Furthermore, such a mandate could be anticompetitive by further strengthening Korea's ISP oligopoly of three major providers to the detriment of the content industry," it added.

The report was apparently referring to Korea's top ISPs -- SK Broadband Co., KT Corp. and LG Uplus Corp.

USTR also pointed out that Washington has raised the issue with Seoul on several occasions last year.

In the 2023 edition of the report, USTR touched on the issue as well.

The office also pointed out Korea's restrictions on the export of location-based data, saying they have led to a competitive disadvantage for international suppliers seeking to incorporate such data into services offered from outside Korea.

"For example, foreign-based suppliers of interactive services incorporating location-based functions, such as traffic updates and navigation directions, cannot fully compete against Korean companies because locally based competitors typically are not dependent on foreign data processing centers and do not need to export location-based data," it said.

"Korea is the only significant market in the world that maintains such restrictions on the export of location-based data."

In this year's report, the total number of pages dedicated to Korea-related issues was reduced to six from last year's eight pages.

In the foreword, USTR also pointed out that "each trading partner has a sovereign right to adopt measures in furtherance of legitimate public purposes" -- a sentence that did not appear in the 2023 edition of the report.

After the release of the latest report, US Chamber of Commerce Senior Vice President and Head of International John Murphy issued a statement critical of it.

Murphy claimed that USTR "risks giving a green light to foreign governments to raise barriers against US exports or otherwise discriminate against US companies." (Yonhap)