When Fake News About South Korea Becomes U.S. Policy

Keeyoung Yoon

Adjunct Professor

Hankuk University of Foreign Studies

When "Criticism" Becomes Misinformation: Setting the Record Straight on Korea's Digital Regulations

To most American readers, South Korea is a familiar and trusted ally: a vibrant democracy, a global technology leader, and a key partner of the United States on semiconductors, artificial intelligence, supply chains, and Indo-Pacific security. Yet in some corners of Washington's policy discourse, a very different image of South Korea emerges—one portrayed as discriminating against American firms, quietly favoring Chinese companies, and erecting digital trade barriers found nowhere else in the world.

The issue is not whether South Korea's digital regulations are beyond criticism. No regulatory framework is immune to scrutiny, and both the South Korean government and the National Assembly bear responsibility for explaining their policies more transparently. But criticism and misinformation are not the same thing.

That pattern—not any single allegation—is the real danger. A blatantly false headline is easy to recognize; a plausible-sounding claim is much harder to detect. "South Korea is targeting American companies." "South Korean regulation is a gift to China." "South Korea is the only country in the world that charges network usage fees." "The Coupang case is an example of the South Korean government's persecution of an American company." These assertions are concise and forceful. Yet tracing them back to their sources reveals a consistent pattern: substituting a law's stated purpose with a speculative consequence, describing legislation still pending before the National Assembly as though it were already in force, or repackaging a company's litigation arguments as matters of national security.

Case One: The App Market Law

In August 2021, Reuters reported that South Korea was advancing legislation to prevent Google and Apple from requiring developers to use their proprietary payment systems, suggesting that the measure could effectively prevent the two companies from collecting commissions on in-app purchases. South Korea's own regulator, the Korea Communications Commission, described the same law differently. In an October 2021 press release, the Commission explained that the central purpose of the amended Telecommunications Business Act was to prohibit app market operators from requiring developers to use a specific payment method—not to abolish commissions outright.

Subsequent implementation confirmed this distinction. Apple's guidance for developers in South Korea states that apps using external payment methods remain subject to a 26 percent commission. In other words, Apple permitted alternative payment methods while continuing to collect commissions. Claims in news reports and on social media that the law had "ended" Apple and Google's commissions therefore overstated its actual effect. As the research report concludes, this case illustrates how an exaggerated "end of commissions" narrative portrayed South Korea's regulation as far more sweeping—and far more hostile to digital platforms—than it actually was.

Case Two: Platform Regulation

In January 2024, Charles Freeman, Senior Vice President for Asia at the U.S. Chamber of Commerce, argued that South Korea's proposed platform regulation could arbitrarily target foreign firms in violation of international trade commitments. The Korea Times also reported remarks attributed to former White House National Security Advisor Robert O'Brien suggesting that the proposed legislation could become a "gift" to the Chinese Communist Party. Together, these comments reinforced a broader narrative in the United States that South Korean regulation "punishes American companies and helps Chinese ones.“

South Korea's Fair Trade Commission, however, described a very different regulatory framework. In an official briefing in September 2024, Chairman Han Ki-jeong explained that the Commission had abandoned its original proposal to pre-designate covered platforms in favor of determining market dominance retroactively, based on actual violations. According to the official government policy briefing, platforms with annual revenue below 4 trillion won would be excluded, and the proposed rules would apply to four categories of anticompetitive conduct—self-preferencing, tying, restrictions on multihoming, and most-favored-nation clauses—across six sectors, including brokerage, search, video, social media, operating systems, and digital advertising. Nationality was not among the criteria.

The Washington-based Korea Economic Institute of America reached a similar conclusion in an October 2024 analysis, noting that South Korea's own leading digital platforms, including Naver and Kakao, would also fall within the scope of the proposed legislation. This makes the claim that the measure was designed to target American firms difficult to substantiate. At the heart of the controversy, therefore, lies the transformation of a nationality-neutral, market-dominance framework into a narrative of anti-American regulation.

Case Three: The Network Usage Fee Dispute

In April 2026, the Korea JoongAng Daily reported that the Office of the U.S. Trade Representative (USTR) had posted on its official X account that no country in the world charges network usage fees for internet traffic except South Korea. It is a striking claim, implying that South Korea operates a uniquely exceptional system.

USTR's own official documents present a more nuanced picture. The agency's 2026 National Trade Estimate Report states that, since 2021, several bills have been introduced in South Korea's National Assembly that would require certain foreign content providers to pay network usage fees to Korean internet service providers. In other words, it describes proposed legislation—not an existing, universally applicable legal requirement. USTR's 2024 National Trade Estimate Report uses similar language, referring to bills pending before the National Assembly that could require such payments.

A bill under consideration and a law in force are not the same thing. Yet in parts of the U.S. policy debate, conditional language—"would require" and "could require"—has gradually been transformed into the categorical claim that "South Korea imposes network usage fees." As the research report concludes, the recurring distortion in this debate has been to conflate four distinct issues: the 2020 service-stability obligation, pending legislation, administrative discussions, and ordinary commercial interconnection agreements. The result is the misleading impression that South Korea already has a legal regime requiring foreign content providers to pay network usage fees.

Case Four: Coupang

On July 1, 2026, Republican members of the U.S. House Judiciary Committee released an interim report titled Closed for Competition: South Korea's Discriminatory Attacks on American-owned Businesses. The accompanying press release alleged that South Korea had conducted a discriminatory campaign against American-owned firms, with Coupang presented as the principal example.

The report characterized Coupang's data breach as an incident involving a disgruntled former employee who downloaded a limited amount of customer data. It acknowledged that although the employee could theoretically have accessed information associated with as many as 33.7 million accounts, the data actually downloaded and retained involved approximately 3,000 accounts. The report further asserted that more than ten Korean government agencies had issued 4,229 document requests and conducted 652 employee interviews related to Coupang, presenting this as evidence of a coordinated, government-wide campaign.

South Korea's Personal Information Protection Commission (PIPC), however, reached a markedly different conclusion. In a June 11, 2026 press release, the Commission found that inadequate management of authentication signing keys and access controls—fundamental security failures—had resulted in the exposure of the personal information of approximately 37.55 million individuals. The Commission imposed a fine of approximately 624.68 billion won, together with an additional administrative penalty, and separately fined Coupang Fulfillment Services for related violations.

Independent reporting likewise highlighted the divergence between the two narratives. The Associated Press reported that the South Korean government rejected the House report as reflecting only Coupang's account of the events, while the Ministry of Foreign Affairs maintained that the investigation had been conducted lawfully and without discrimination under domestic law. Reuters similarly reported that the presidential office disputed the "3,000 accounts" figure cited by Coupang and the congressional report, emphasizing that Korean authorities regarded the potential exposure of tens of millions of accounts as a serious security incident. The central discrepancy, therefore, is the contrast between a narrative centered on a "limited breach of 3,000 accounts" and the formal findings of Korean regulators, which concluded that fundamental security failures resulted in the exposure of the personal information of tens of millions of people.

The Common Thread

These four cases appear unrelated, yet they share the same underlying pattern. In the app market case, "a ban on requiring a specific payment method" became "the end of commissions." In the platform regulation debate, "a market-dominance standard" became "targeting American firms." In the network usage fee dispute, "pending legislation" became "an already-enforced system." In the Coupang case, "an investigation into a privacy-law violation" became "discriminatory persecution of an American company." As the research report concludes, this pattern repeatedly compresses complex South Korean laws and regulatory policies into simple slogans—"anti-American regulation," "a gift to China," "the end of commissions," and "an already-enforced network usage fee regime"—that obscure what the underlying rules actually do.

This is not merely a Korean problem. The United States is fully entitled to criticize the domestic regulations of a close ally. If South Korean law is opaque, excessive, or genuinely discriminatory, American officials and lawmakers should raise those concerns. But such criticism must rest on an accurate understanding of the facts. Is the measure a bill or an enacted law? Is the governing standard nationality or market dominance? Did the law abolish commissions, or did it prohibit requiring a specific payment method? Is a company's litigation narrative being given greater weight than a government's official investigative findings? When these questions go unasked, criticism ceases to be a legitimate defense of free trade and instead becomes the spread of misinformation.

The stakes for the United States are significant. Washington has long championed a rules-based international order and transparent trade policy. But when an ally's lawful domestic regulations are mischaracterized and corporate grievances are reframed as matters of national interest, U.S. trade policy risks appearing less a matter of principle than an instrument of political or commercial pressure.

South Korea also has much at stake. Misleading narratives can narrow the democratic space for legitimate debate over platform accountability, privacy protection, consumer protection, and fair competition. But the greatest cost may be borne by the U.S.–South Korea alliance itself, whose strength ultimately depends on mutual trust and a shared commitment to facts.

What is needed now is not an emotional rebuttal but a stronger commitment to factual accuracy. The South Korean government and the National Assembly should proactively provide English-language fact sheets, explanatory materials, and side-by-side comparisons of legal texts, clearly distinguishing what is in force from what remains pending, what is prohibited from what is permitted, and whether domestic and foreign firms are subject to the same legal standards. American media, members of Congress, think tanks, and trade officials, for their part, should not treat the advocacy of any single company or industry as a sufficient basis for shaping alliance policy.

Misinformation may serve short-term interests—delaying regulation, strengthening a negotiating position, or providing a convenient political talking point. Over time, however, it erodes American credibility, undermines South Korea's regulatory sovereignty, and weakens the strategic value of the U.S.–South Korea alliance.

South Korea is not asking the United States to disregard the interests of its own companies. It is asking the United States to examine the facts first. In a relationship as consequential as the U.S.–South Korea alliance, that is not too much to ask.

[References]

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https://developer.apple.com/support/storekit-external-entitlement-kr

•  Kang, T.-H. (2026, April 28). USTR highlights Korea’s network usage fee among “craziest trade barriers.” Korea JoongAng Daily. 

https://www.koreajoongangdaily.com/korea/ustr-highlights-koreas-network-usage-fee-among-craziest-trade-barriers/12588287

•  Kim, H. & Shim, K.-S. (2026, July 3). S.Korea presidential office rejects Coupang, US claims of discriminatory treatment. Reuters. 

https://www.reuters.com/world/asia-pacific/south-korea-presidential-office-disputes-coupang-claim-only-3000-records-2026-07-03/

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https://keia.org/analysis/digital-trade-wars-2-new-us-legislation-labels-kftcs-tech-regulation-discriminatory-but-is-it/

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https://apnews.com/article/south-korea-coupang-data-breach-house-committee-b4da0647a0cdf0c9dd9be9e820e3e4bb

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https://www.korea.kr/briefing/policyBriefingView.do?newsId=156649831

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https://ustr.gov/sites/default/files/files/Press/Releases/2026/National%20Trade%20Estimate%20Report%202026.pdf 

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https://pipc.go.kr/np/cop/bbs/selectBoardArticle.do?bbsId=BS074&mCode=C020010000&nttId=12171& 

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https://judiciary.house.gov/sites/evo-subsites/republicans-judiciary.house.gov/files/evo-media-document/south-korea-discriminatory-enforcement-report-draft-final.pdf 

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