Moving Beyond Disputes toward a Future-Oriented Partnership: 

Korea–U.S. Digital Trade Issues

               Hongyeol Kim

Ph.D. in Information Sociology

Adjunct Professor

Duksung Women's University 

Introduction

Digital technology is rapidly reshaping the global economic system and transforming the traditional paradigm of international trade, simultaneously creating vast new markets while generating increasingly complex conflicts of interest. Whereas trade disputes in the past largely revolved around tangible goods and tariff barriers, today's major conflicts increasingly concern borderless data flows, platform dominance, and control over digital infrastructure across borders and industries. These developments are unfolding worldwide and are closely intertwined with intensifying competition for technological leadership among nations, as well as a growing emphasis on advancing national interests.

Countries around the world now face a critical historical moment. They must address domestic digital challenges in a forward-looking manner to protect the rights and interests of their citizens, strengthen data sovereignty, and promote the development of future-oriented strategic industries. At the same time, they must resolve sensitive digital disputes with major trading partners in ways that advance the mutual interests of all parties involved.

This challenge is becoming increasingly evident in relations between South Korea and the United States, two countries that have long maintained a strong military and economic alliance. In recent years, disagreements over digital trade and regulatory issues have become more pronounced. The U.S. government has characterized certain South Korean regulatory initiatives as trade barriers that disadvantage American Big Tech companies and has ap-plied pressure through trade channels. South Korea, however, maintains that these measures represent a legitimate exercise of regulatory sovereignty aimed at protecting market fairness, consumer rights, and the security of its domestic digital ecosystem.

This column examines four major digital issues between South Korea and the United States, focusing on the background of each issue, the central points of contention, the differing perspectives of the two countries, and potential areas for mutually acceptable compromise. Based on this analysis, it also offers policy recommendations on how Seoul and Washington can move beyond current disputes and build a foundation for sustainable coop-eration and shared prosperity in the digital era.

Case 1. Restrictions on the Overseas Transfer of High-Precision Map Data

The first, longest-standing, and one of the most symbolically significant digital disputes between South Korea and the United States concerns South Korea's restrictions on the overseas transfer of high-precision map data. Cit-ing the unique security challenges arising from its status as the world's only divided country, the South Korean government has maintained strict re-strictions on the overseas transfer of high-precision digital map data at a scale of 1:5,000, arguing that such information could reveal the locations of sensitive national security facilities.

In response, U.S. technology companies, including Google, have strongly criticized these restrictions, arguing that they constitute a major non-tariff trade barrier and represent a form of "Galápagos-style" regulation that pre-vents foreign companies from providing global-standard services in the Ko-rean market. They contend that restricted access to high-precision map data hampers the provision of services such as Google Maps-based in-vehicle navigation, advanced autonomous driving technologies, and global loca-tion-based services (LBS).

Since 2007, Google has sought permission to export 1:5,000-scale high-precision map data, but the Korean government rejected the request, citing concerns that military bases and other security facilities could be exposed if the data were combined with satellite imagery. The government subsequent-ly proposed establishing servers in South Korea as an alternative, but Google declined the proposal.

In 2016, Google submitted another application to export the data. The Committee for Deliberation on the Overseas Export of Surveying Results, which includes officials from the Ministry of Land, Infrastructure and Transport and the National Intelligence Service, among others, approved the request on the condition that security facilities be blurred and the dis-play of coordinates be restricted. However, Google did not accept these conditions, and the request was ultimately denied. Later, after the Trump administration identified South Korea's restrictions on map-data exports as a non-tariff trade barrier and raised the issue in the context of reciprocal tariff negotiations, Google submitted a new application in February 2025 and filed a supplementary application in February 2026 in response to the gov-ernment's request for additional information. In February 2026, the Korean government approved the transfer subject to several conditions, citing the need to strengthen the infrastructure for future industries and reduce fric-tion in global trade.

Until a final agreement was reached, the issue repeatedly appeared on the agenda of ministerial-level meetings and working-level negotiations be-tween the two countries' trade authorities, remaining unresolved for many years. Rather than allowing the dispute to escalate into a prolonged con-frontation, South Korea and the United States engaged in sustained dia-logue and close consultations to develop practical technical solutions. Ulti-mately, the two sides reached a carefully negotiated compromise that ad-dressed security concerns while accommodating technological innovation.

Under the agreement, a domestic partner operating under Korean law would first process the data on servers located in South Korea. Only after this process would map information deemed free of security concerns be exported for navigation purposes, subject to review and approval by the South Korean government. The parties also agreed that sensitive locations and imagery, including military bases and other major national security fa-cilities, would be thoroughly obscured through measures such as mosaick-ing when South Korean territory is displayed on global services such as Google Maps and Google Earth.

Ultimately, this case illustrates how technical safeguards can provide a prac-tical compromise in situations where national security concerns intersect with the demands of global digital services, avoiding both the unconditional relaxation of regulations and a blanket ban on data exports.

Case 2. The Debate over Network Usage Fees for Global Big Tech Companies

The second case concerns the ongoing domestic and international debate over whether global Big Tech companies should contribute to the costs of the digital infrastructure necessitated by the enormous volumes of traffic they generate. This issue has become a major global controversy, not only in South Korea but also within the European Union (EU). The European Commission has formally examined whether Big Tech companies that gen-erate substantial network traffic should share the costs of network invest-ment to ensure the sustainability of digital infrastructure, and it has explored the possibility of establishing an institutional framework for this purpose through public consultations. However, the legislative process has faced challenges due to differing views between telecommunications-oriented countries, such as France and Italy, which support such measures, and other member states that oppose them.

The COVID-19 pandemic accelerated the use of video streaming and online services, resulting in a significant increase in traffic generated by global content providers (CPs) such as Netflix and YouTube. In response, Korean Internet service providers (ISPs) and members of the National Assembly began actively pursuing legislation that would require foreign Big Tech companies to pay network usage fees, arguing that these companies gener-ate substantial revenues while contributing little or nothing to the costs of expanding and upgrading network infrastructure.

South Korea's three major telecommunications operators—SK Telecom, KT, and LG Uplus—have argued that global Big Tech companies effectively benefit from domestic infrastructure without adequately sharing the associ-ated costs. Given that YouTube and Netflix account for a significant share of internet traffic in South Korea, they contend that these companies should also contribute to the costs of maintaining and upgrading telecommunica-tions networks. Domestic content providers such as Naver and Kakao, meanwhile, already bear substantial network-related costs, leading to con-cerns that exempting global Big Tech companies from comparable obliga-tions creates market distortions and places domestic firms at a competitive disadvantage. Rather than imposing a uniform legal obligation through leg-islation, the Korean government has emphasized voluntary negotiations among the relevant parties while continuing policy discussions aimed at mediating disagreements over network usage fees.

The U.S. side, meanwhile, has strongly opposed such proposals in defense of the interests of American companies. The U.S. government and major technology companies argue that Korean consumers already pay Internet service providers (ISPs) legitimate fees for Internet access, and that impos-ing additional network usage fees on content providers would amount to double charging, potentially undermine the principle of net neutrality, and create an unfair digital trade barrier in violation of the non-discrimination principles of the Korea–U.S. Free Trade Agreement. South Korea, by con-trast, argues that telecommunications infrastructure constitutes critical pub-lic infrastructure and that it is fair and reasonable for major global compa-nies that generate massive volumes of traffic and place substantial demands on network capacity to bear at least part of the costs of maintaining and up-grading that infrastructure.

Although the two sides hold sharply divergent views, practical solutions ex-ist that could prevent the dispute from escalating into a broader trade con-frontation. Rather than creating diplomatic friction by unilaterally imposing network usage fee requirements through legislation, more pragmatic ap-proaches could be explored. One option would be for global CPs to expand their CDN and caching infrastructure in South Korea, enabling content to be delivered closer to end users while reducing traffic burdens on interna-tional networks and certain domestic network segments and allowing com-panies to directly share the costs of the necessary infrastructure. Another possibility would be to encourage companies from both countries to jointly establish a "Digital Infrastructure Co-Growth Fund" and make voluntary contributions to next-generation 6G and network infrastructure projects, thereby creating a more sustainable foundation for compromise.

Case 3. Online Platform Regulation (Online Platform Act and the Ex Post Presumption Approach)

The third case concerns online platform regulation, including the proposed Online Platform Act and amendments to the Fair Trade Act adopting an ex post presumption approach. These measures are intended to prevent abusive conduct by dominant platform companies and foster a fairer digital ecosystem. The Korea Fair Trade Commission (KFTC) and the National Assembly initially considered introducing a "prior designation" system, similar in some respects to the European Union's Digital Markets Act (DMA), under which major platform companies would be designated in advance and subjected to special regulatory obligations. However, amid strong opposition from various stakeholders, the policy direction shifted toward amendments to the Fair Trade Act that would allow a company's market-dominant status to be presumed after certain legal violations have occurred.

Nevertheless, major U.S. technology companies and business organizations immediately expressed strong concerns. The Office of the U.S. Trade Rep-resentative (USTR) argued that, even after the shift toward an ex post pre-sumption approach, the proposed thresholds based on factors such as reve-nue and user numbers would effectively target leading U.S. technology companies, including Google, Apple, and Meta, raising concerns about dis-criminatory regulation and prompting broader opposition from the United States. In particular, U.S. stakeholders argued that the measures could con-stitute a non-tariff trade barrier targeting American companies and poten-tially conflict with the non-discrimination principles of the Korea–U.S. Free Trade Agreement (FTA), warning that the legislation could lead to in-creased trade friction between the two countries.

Interestingly, the regulatory proposal has also generated diverse perspec-tives and competing interests within South Korea's political and business communities. Some domestic civil society organizations, small-business groups, and opposition politicians argue that prompt legislative action is necessary to protect small businesses and consumers from abuses of market power by dominant platforms. By contrast, some segments of South Ko-rea's technology industry and academic community have expressed con-cerns that such regulations could constrain domestic platforms such as Nav-er and Kakao, weaken incentives for innovation, and ultimately produce the unintended consequence of allowing large foreign e-commerce compa-nies—including Chinese platforms that may circumvent or otherwise avoid the regulatory framework—to gain greater market share in South Korea.

Although the controversy has generated strong criticism and opposition both domestically and internationally, it also presents an opportunity to reach a more sophisticated compromise through sustained and substantive dialogue. The U.S. administration, Congress, and antitrust authorities are themselves engaged in significant antitrust litigation, regulatory actions, and legislative debates aimed at addressing concerns over the market power and potential abuses of major technology companies in the United States. Therefore, if the Korean government avoids adopting an overly broad pre-sumption that effectively shifts the burden of proof, enhances procedural transparency in developing the regulatory framework, and demonstrates a clear commitment to enforcing the law fairly and objectively without dis-criminating against companies from either country, it may be possible to minimize trade friction while establishing a balanced regulatory framework that promotes fairness in the domestic digital market.

Case 4. Privacy and Consumer Regulation of Platform Companies (The Coupang Case and Related Issues)

The fourth case concerns privacy and consumer protection regulation of platform companies, including the Coupang case, which has recently emerged as one of the most sensitive and contentious digital trade issues af-fecting the governments and industries of both countries. South Korean regulatory authorities have conducted intensive investigations into Coupang, a U.S.-incorporated company listed on the New York Stock Exchange, over allegations involving the manipulation of search rankings, the use of employees to post product reviews, and practices that allegedly encourage consumers to subscribe to paid memberships while making cancellation more difficult—commonly referred to as "dark patterns."

The authorities have imposed fines amounting to hundreds of billions of won and pursued criminal referrals, leading to heightened tensions and concerns regarding regulatory disputes between the two countries. In par-ticular, the U.S. House Judiciary Committee issued an interim report char-acterizing the Korean government's investigations and sanctions against Coupang as discriminatory treatment of an American company. More re-cently, in late July 2026, Republican Representative Michael Baumgartner of Washington State introduced legislation that would restrict entry into the United States for foreign government officials who discriminate against American companies or potentially impose removal measures against such officials, further intensifying concerns over the issue. The lawmakers spe-cifically cited the KFTC's investigations into Coupang, alleging that Korean authorities had discriminated against an American-linked company through numerous investigations and thousands of requests for documents.

The issue initially arose from legitimate domestic policy objectives: protect-ing consumer rights in South Korea's e-commerce market, preventing un-fair commercial practices, and establishing a fair competitive market order. However, when viewed from the U.S. perspective, the development of the issue and its major points of contention have led to the perception that the Korean government targeted an innovative company with substantial U.S. capital investment and imposed excessive and opaque domestic regulations that allegedly diverge from global standards.

The issue is increasingly evolving beyond a matter of domestic competi-tion-law enforcement into a potentially significant diplomatic and political dispute between South Korea and the United States, with possible implica-tions for the investment environment affecting South Korean companies operating in the United States. Looking objectively at possible future devel-opments, it cannot be ruled out that the U.S. administration may raise plat-form regulation issues, including the Coupang case, as formal agenda items in future negotiations concerning reciprocal tariffs or broader trade ar-rangements. Such issues could potentially be used as leverage to pressure South Korea to substantially revise or reconsider digital regulations that Washington views as excessive.

The most realistic and sustainable way to address such a highly sensitive and contentious issue is for South Korean regulatory authorities to substan-tially strengthen the procedural legitimacy, transparency, and predictability of regulatory enforcement in accordance with international standards. South Korean competition and administrative authorities should transparently dis-close regulatory guidelines, investigative procedures, and criteria for calcu-lating fines, thereby demonstrating that enforcement measures are not dis-criminatory actions targeting foreign-invested or U.S.-listed companies, but rather universal consumer-protection measures applied consistently and equally to all businesses.

At the same time, South Korea should consider establishing a permanent public-private consultative mechanism to encourage platform companies to voluntarily correct potentially deceptive practices and strengthen consumer protection measures. Such a mechanism could help reduce regulatory un-certainty and mitigate political and diplomatic concerns in the United States regarding legal sanctions and regulatory enforcement.

Conclusion

The four major digital issues examined above vividly demonstrate the com-plexity, dynamism, and potential volatility of the digital economic relation-ship between South Korea and the United States today. Depending on the nature of each issue and the maturity of the dialogue surrounding it, some cases have reached mutually acceptable compromises and can be regarded as largely resolved, while others remain unsettled and continue to evolve amid significant disagreements.

The issue of restrictions on the overseas transfer of high-precision map data provides a positive precedent in which national security concerns were carefully balanced against the needs of technological innovation, ultimately leading to a resolution through dialogue and the implementation of tech-nical safeguards. By contrast, ongoing issues such as network usage fees for global technology companies and online platform regulation, including the Online Platform Act, remain unresolved because the industrial interests and regulatory approaches of the two countries continue to diverge, creat-ing significant challenges for trade authorities in both countries.

Nevertheless, issues such as network usage fees and the Online Platform Act may ultimately be addressed through constructive policy coordination and carefully designed legislation consistent with global standards and emerging regulatory trends, particularly as concerns over the social respon-sibilities and market power of major technology companies are also receiv-ing increasing attention among economists and policymakers in the United States.

By contrast, privacy and consumer regulation involving U.S.-listed plat-form companies, including the Coupang case, is closely intertwined with broader concerns in the United States regarding the regulatory treatment of American companies and trade-related issues, including reciprocal tariff ne-gotiations. Addressing such issues therefore requires a high degree of polit-ical and diplomatic judgment, as well as substantial time and sophisticated diplomacy to reconcile competing interests and reduce tensions.

Nevertheless, as noted above, the two countries should seek common ground by demonstrating that the essence of the Coupang case lies not in discriminatory treatment of a U.S.-listed company, but in the consistent ap-plication of universal consumer protection principles. The key point that should not be overlooked is that the expansion of the digital economy should not become a source of conflict between the two countries, but ra-ther a new engine of growth and cooperation for both the Korean and U.S. economies in the era of the Fourth Industrial Revolution.

Given the structure of global value chains, South Korea and the United States cannot build a sustainable digital economy by excluding one another. South Korea should avoid both unconditional deregulation and an uncom-promising pursuit of narrow national interests. Instead, it should adopt a balanced approach that firmly protects technological capabilities and legiti-mate national interests while actively leveraging the foundations of "mutual prosperity": transparent institutional governance and sustained high-level strategic dialogue. By using these tools to address U.S. concerns while safeguarding the fairness and integrity of South Korea's domestic market, the two countries can create the conditions for a genuine win-win partner-ship and shared prosperity in the expanding digital economy.