Is a Streaming Crackdown Coming to South Korea? Regulator Weighs Targeting Music Platforms With Competition Law

Seoul, South Korea, where a forthcoming competition law could extend to music streaming platforms. Photo Credit: Tom Hill

A music streaming crackdown could be coming to South Korea – complete with potentially massive penalties for certain business practices. The possible regulatory action involving streaming services just recently came to light in regional reports from outlets including Korea JoongAng Daily. According to that breakdown, December saw South Korea’s Fair Trade Commission (FTC) announce the forthcoming introduction of the Platform Competition Promotion Act.

In keeping with its title, the measure will per the mentioned source establish “strict rules” – and the threat of the aforesaid massive penalties – for “monopolistic behavior.” From the outset, the law has been expected to affect the likes of Meta, Google, and Apple, besides domestic tech players such as Naver and Kakao.

Now, however, FTC Chairman Han Ki-jeong has signaled that the law could likewise impact music streaming services. Per the translation provided by Korea JoongAng Daily, the government official during an event in Seoul yesterday spelled out that the Fair Trade Commission “‘is eyeing music streaming services to be included in this bill, as such platforms have infiltrated deep into people’s lives.’”

Of course, those comments raise far-reaching questions about exactly how the streaming landscape could change in the nation of approximately 52 million. For reference, Spotify launched in South Korea a little over three years ago – and without a free tier.

Meanwhile, reports last month indicated that Apple had cracked a 25 percent share of the Asian nation’s smartphone market for the first time, presumably driving material growth for services including Apple Music.

In any event, it looks as though it’ll be some time before concrete details, let alone passage and implementation specifics, emerge regarding the legislation. Per the same outlet, “intense backlash” from the business community immediately followed the measure’s initial announcement, prompting the FTC to “tentatively defer the bill.”

And when asked at the Thursday event about the legislation’s timeline, Han Ki-jeong declined to weigh in, instead relaying that the FTC would “‘actively seek voices from the industry.’”Worth highlighting in conclusion are other recent regulatory measures affecting music streaming platforms. Earlier this week, Spotify announced a price increase in France following the implementation of a “streaming tax.” This France-specific cost bump, expected to be laid out in detail soon, is directly tied to the much-protested 1.2 percent tax, the Stockholm-based company made clear.

Lastly, it was only in December that Spotify revealed it wouldn’t be leaving Uruguay after all, reversing a late-November announcement set in motion by a copyright-law overhaul. At the eleventh hour, government officials and the platform’s execs hammered out a decree that seemingly shifted the appropriate payment obligations to labels themselves.