Introduction
Digital regulation is increasingly becoming a trade issue between the United States and its major partners. Rules once discussed mainly in terms of competition, consumer protection, privacy, or telecommunications policy are now being examined in Washington for their effects on U.S. companies.
This shift has become particularly visible since the beginning of the second Trump administration. In February 2025, President Donald Trump directed the U.S. government to identify foreign taxes and regulations that discriminate against, disproportionately affect, or otherwise undermine the competitiveness of American companies. The scope went beyond digital services taxes to include restrictions on cross-border data flows, network usage fees, local-content requirements, and other regulations affecting digital services. The White House also specifically identified the European Union’s Digital Markets Act (DMA) and Digital Services Act (DSA) as measures that would face U.S. scrutiny.
The issue is particularly sensitive because many of the world’s largest digital platforms are American. Regulations based on market size or market power can therefore affect U.S. companies more heavily even when nationality is not part of the regulatory criteria. Washington increasingly regards such effects as a possible trade concern, while Korea and the EU maintain that governments must retain the ability to regulate companies operating in their markets. The disagreement is therefore not simply about whether digital firms should be regulated, but about when domestic regulation begins to constitute discriminatory treatment of foreign companies.
Washington Broadens the Meaning of a Digital Trade Barrier
The U.S. position has become closely tied to its broader emphasis on reciprocal trade. The February 2025 presidential memorandum made clear that discriminatory or disproportionate foreign regulations could lead to tariffs or other responses. The Office of the United States Trade Representative (USTR) has consequently become more involved in matters that might previously have remained within domestic competition or technology policy.
This is particularly relevant for Korea. Under the Korea Strategic Trade and Investment Deal announced in November 2025, the two countries committed to ensuring that U.S. companies would not face discrimination or unnecessary barriers under laws and policies concerning digital services. Network usage fees and online platform regulations were specifically mentioned, together with efforts to facilitate cross-border transfers of location, reinsurance, and personal data. Digital regulation has thus become part of the formal Korea-U.S. trade agenda rather than a matter handled only by domestic regulators.
Washington is also paying attention to the practical effects of regulation. A platform rule may apply the same revenue or user thresholds to domestic and foreign firms, but U.S. authorities may still question it if most of the companies subject to the rule are American. For Korea and the EU, this presents an obvious difficulty. If American companies hold many of the strongest positions in global digital markets, regulation aimed at market power will naturally affect them more often.
The Coupang case showed how quickly this issue can move into trade policy. On January 22, 2026, U.S. investment firms Greenoaks and Altimeter filed a Section 301 petition with USTR, alleging that Korean government measures concerning Coupang were unreasonable and discriminatory. The petition requested a U.S. investigation and possible remedies, but the investors withdrew it on March 9. The Korean Ministry of Trade confirmed the withdrawal and clarified that USTR had not announced a broader Section 301 investigation into Korea’s digital policies.
The petition therefore did not result in an investigation, and the investors’ allegations should not be confused with an official U.S. determination that Korea discriminated against Coupang. Still, the episode is significant because it showed how a domestic regulatory or enforcement dispute involving substantial U.S. commercial interests can rapidly become a bilateral trade issue.
The EU Holds Its Ground: Regulation as a Matter of Market Governance
The European Union has taken a relatively firm position in response to U.S. criticism. Brussels maintains that the DMA and DSA are internal market regulations based on the economic role of digital companies rather than their nationality. Under the DMA, companies are designated as “gatekeepers” according to quantitative and qualitative criteria concerning their size and position as important gateways between businesses and users. While most gatekeepers are American companies, the current list also includes China’s ByteDance and Europe’s Booking.com.
From the EU’s perspective, the predominance of American companies among regulated firms reflects the structure of the digital market rather than discriminatory regulatory design. Companies such as Google and Apple are subject to additional obligations because of the market positions they occupy, not because they are headquartered in the United States. This distinction remains at the center of the European response to Washington.
The EU has also continued enforcement despite increasing U.S. pressure. In April 2026, the European Commission completed its first review of the DMA and concluded that the existing framework remained “fit for purpose,” citing greater consumer choice and increased opportunities for competing businesses. On July 23, the Commission imposed two fines on Google totaling €890 million for self-preferencing in Google Search and restrictions affecting businesses seeking to direct consumers to alternative purchasing channels outside Google Play.
USTR responded on the same day. Trade Representative Jamieson Greer criticized what he described as an increasingly aggressive European approach toward U.S. technology firms and warned that the Commission’s actions were creating uncertainty in transatlantic trade relations. The exchange illustrates the central disagreement between the two sides: Brussels considers the DMA a legitimate exercise of market regulation, while Washington increasingly examines its impact through the lens of trade and U.S. corporate competitiveness.
The EU nevertheless continues to support open digital trade. The Digital Trade Agreement signed with Korea on June 10, 2026 provides binding rules intended to facilitate trusted data flows, improve legal certainty for businesses, and prevent unjustified digital trade barriers, while preserving the policy space of both sides to regulate new challenges in the digital economy. The European position is therefore not simply one of tighter regulation, but of combining market openness with the right to regulate.
Korea Balances Domestic Regulation and U.S. Trade Concerns
Korea shares part of the EU’s reasoning but operates under different conditions. Concerns over the influence of large platforms, competition between platforms and smaller businesses, personal-data protection, network costs, and digital market concentration provide legitimate grounds for domestic regulatory action. Seoul has consistently argued that such policies are not intended to target American companies.
At the same time, Korea has placed greater emphasis on consultation with Washington. During Minister for Trade Yeo Han-koo’s visit to Washington in January 2026, the Korean government directly addressed concerns from U.S. officials, members of Congress, and industry representatives over Korean digital legislation. The Ministry of Trade stated that these measures were neither discriminatory toward U.S. companies nor intended to create unnecessary barriers, while also stressing the importance of stakeholder consultation and interagency coordination.
The handling of Google’s high-precision map data provides another example of this approach. On February 27, 2026, Korea approved Google’s request to export 1:5000-scale map data, which had previously been restricted on national-security grounds. The decision was subject to strict conditions, including security processing of military and sensitive facilities, restrictions on coordinate information, and the use of domestic servers to process original data before limited information could be transferred abroad. Sensitive information such as contour data was excluded from the transfer.
This was not a simple removal of regulation. Korea relaxed a longstanding restriction while retaining measures intended to address the security concerns behind it. Together with the Coupang episode, the case illustrates Korea’s current challenge: it needs to prevent domestic regulation from being interpreted as discriminatory treatment of U.S. companies without giving up its ability to pursue competition, privacy, or national-security objectives.
Korea and the EU Face Similar Questions, but Different Constraints
Korea and the EU share considerable common ground. Both reject the idea that open digital trade requires major platforms to remain largely outside domestic regulation, and both support competition, data protection, consumer rights, and trusted cross-border data flows. The Korea-EU Digital Trade Agreement reflects this balance by promoting digital trade while preserving regulatory policy space.
Their room for maneuver, however, is different. The EU has a large integrated market and an established digital regulatory framework that is already being enforced. It therefore has greater capacity to withstand prolonged pressure from individual trading partners. Korea’s relationship with the United States is broader and includes security, investment, semiconductors, technology, and strategic supply chains in addition to trade. The November 2025 bilateral commitments also give Washington a direct channel for raising Korean platform regulation, network usage fees, and data flows as trade concerns.
For this reason, Korea would gain little from simply copying the European approach or framing the issue as a Korea-EU front against Washington. The EU experience is more useful as a regulatory reference. Its treatment of gatekeepers, use of market-based criteria, and efforts to combine data protection with digital trade can help Korea design regulations that are easier to explain and defend internationally.
Policy Options for Korea: Reducing Trade Friction without Giving Up Regulatory Space
For Korea, the strongest response to U.S. criticism is not to avoid digital regulation, but to make its policy basis and application as clear as possible. Rules based on revenue, user numbers, transaction volume, network effects, or market influence should be linked to identifiable competition, consumer-protection, or public-policy concerns. Where Korean and foreign companies occupy comparable market positions, comparable standards should apply. Regulatory impact assessments can help demonstrate that distinction and reduce the risk that formally neutral criteria are interpreted as targeting particular foreign firms.
The regulatory process also matters. Domestic and foreign stakeholders should have reasonable opportunities to submit evidence, and the government should explain why particular measures were chosen and whether less restrictive alternatives were considered. Greater transparency does not mean allowing the United States or U.S. companies to determine Korean legislation. Rather, it strengthens Korea’s ability to defend its rules as evidence-based, proportionate, and non-discriminatory.
More targeted regulatory approaches may also reduce unnecessary friction. The Google map decision illustrates how Korea can expand commercial access while retaining safeguards for sensitive information. Similar approaches involving certification, contractual protections, domestic processing, or differentiated treatment of sensitive data could be considered in other areas. Network usage fees and platform regulation require the same attention: their economic rationale should be clear, domestic and foreign firms should be treated consistently, and regulation should focus on identifiable problems such as self-preferencing, excessive bargaining power, or control over important digital gateways.
Regular Korea-U.S. consultation should accompany these efforts, particularly as disputes increasingly extend to AI, cloud services, data governance, online advertising, and cybersecurity. The Coupang petition showed how quickly a domestic regulatory issue can enter U.S. trade politics, while the Google map case demonstrated that some disagreements can be eased by adjusting regulatory methods without abandoning the underlying policy objective. The EU’s experience also offers Korea a useful reference for combining regulatory authority with continued engagement with Washington.
For Korea, avoiding every disagreement with the United States is neither realistic nor necessary. The more sustainable approach is to ensure that digital rules have a clear policy basis, apply consistent standards to comparable firms, and impose no broader restrictions than necessary. The central challenge is not whether Korea should regulate its digital market, but how it can preserve legitimate regulatory space while limiting the risk that such regulation is characterized as discrimination.