South Korea has realized one of the most dynamic economies in the world by working hard with original ideas and achieving a certain scale where rewards follow. However, a new issue quietly putting the brakes on this trend is the competition authorities and digital market regulations that punish successful companies first and address consumer harm later. As a result, innovation is being hindered.

According to a recent study conducted by Competere, the national economy is expected to face an economic loss of up to USD 469 billion over the next decade, translating to approximately USD 9,063 per person and USD 22,657 per household. These are resources that could be used for domestic investment, wages, and the venture community, but they are disappearing due to such regulations.

South Korea, which had adopted an evidence-first approach requiring 'proof of consumer harm' first, has transformed from a foreign perspective into a system where restraining large platforms is fundamental. Looking at online platform bills modeled after the EU's experimental regulatory system, such as the Platform Monopoly Act, predetermined responsibilities are imposed before any wrongdoing by the platform operator is proven. Consequently, this hinders innovation that could provide citizens with high-quality services at relatively low prices. It also makes it difficult for both domestic and foreign companies to grow and dampens investment sentiment.

Small business owners, in particular, suffer significant damage. A cosmetics company in Daegu, operating in an online marketplace, needs a platform that allows it to do business with customers across Korea and Asia. However, if the Fair Trade Commission's regulations require uniform operation, the utility of the online marketplace will inevitably decrease, and costs will rise. In such a situation, companies are forced to consider whether to invest in Korea or redirect resources to more clear and stable foreign markets, a point that the U.S. government is closely monitoring.

These policies, designed to protect domestic companies, paradoxically result in South Korea paying a higher price than any other trading nation. If the recently proposed platform regulation bills are implemented, the per capita GDP impact over the next decade is expected to be at least 22%, and the U.S., closely linked to the Korean economy, is also predicted to suffer a loss of up to USD 525 billion during the same period. South Korea must realize that modifying or halting the Fair Trade Commission's regulations, which are disadvantageous to U.S. companies, is the 'win-win' path to resolving the growth issues it faces and the current tense Korea-U.S. trade relations. A slight shift in policy direction can simultaneously alleviate domestic costs and friction with the U.S.

So, what needs to change?

First, decision-making and investigation criteria should be established based on fundamental economic principles. Are prices rising? Is the range of choices narrowing? Is innovation being hindered? If not, do not punish success. The focus should be on actions that clearly harm users, not on the size or business model of the company.

Also, before introducing significant digital regulations, conduct a transparent cost-benefit study to analyze the impact. This includes an impact analysis on ventures and small businesses. If the hindrance to their innovation is greater than consumer utility, correct the regulatory errors or withdraw them entirely. When intervention is necessary, a micro, temporary approach based on international regulatory standards is preferable. After intervention, the results should be evaluated.

Such procedures are best practices from countries that have successfully established innovation-friendly economic systems. They can help maintain the status of the Korean Fair Trade Commission as a regulatory authority that punishes actual violators while avoiding regulations that punish corporate efficiency or harass with unnecessary regulations.

There is also an unexpected strategic income. If South Korea can undertake policy coordination based on common understanding with the U.S., both countries can realize significant benefits. According to the same analysis data used in the current loss predictions, the effects that Korea and the U.S. can enjoy through reform are substantial and significant.

Returning to the original approach of the Korean Fair Trade Commission, which prioritized consumers based on evidence, is believed to not only restart Korea's growth engine but also ease the tense relationship with the U.S.

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