The average fine South Korea’s competition regulator imposed on American companies over the past decade was 21 times the average for Korean firms, while Chinese companies paid less than one percent of the penalties levied on foreign businesses, according to the Information Technology and Innovation Foundation (ITIF). The figures anchor a wave of U.S. industry complaints that Seoul is squeezing American business nearly a year after promising President Donald J. Trump it would do the opposite.
South Korea’s regulators and ruling party are advancing a raft of measures that fall almost entirely on American companies, according to submissions from the Computer & Communications Industry Association (CCIA), the National Foreign Trade Council (NFTC), ITIF, and the Motion Picture Association (MPA), filed ahead of the Office of the U.S. Trade Representative’s (USTR) October 29 deadline for comments on foreign trade barriers.
The pattern is hard to miss. A government that signed a deal with President Trump, and then refused his request for military aid in the Strait of Hormuz, is now punishing American companies hardest while China, its largest trading partner, barely registers. The filings amount to a test of whether Seoul’s promises to Washington mean anything.
In the November 13, 2025 U.S.-Korea Joint Fact Sheet, which followed President Trump’s visit to South Korea, Seoul committed to “ensure that U.S. companies are not discriminated against and do not face unnecessary barriers.” CCIA says that “notwithstanding the November 2025 commitments,” the chairman of the Korea Fair Trade Commission (KFTC) has renewed his push for platform regulation and added a “Key Investigation Planning Unit,” which NFTC calls “a bureau-level task force designed to intensify regulatory pressure on foreign digital service providers.” Rather than reverse course, NFTC says, the KFTC has “doubled down.”
The numbers back up the complaint. ITIF found the average KFTC penalty on American firms between 2016 and 2025, after adjusting for inflation, was ₩39 billion (roughly $29 million at today’s exchange rate), 21 times the ₩1.9 billion (about $1.4 million) average for Korean companies. U.S. firms absorbed more than 81 percent of all fines on foreign companies; Chinese firms, despite China being Korea’s largest trading partner, took less than one percent. CCIA’s review of 1,203 KFTC decisions found U.S. companies penalized at four to six times the rate of Korean firms and 80 to 90 times the rate of Chinese ones. Seven of the ten largest abuse-of-dominance fines in the agency’s history hit American companies, accounting for 95.5 percent of the money.
Lawmakers from President Lee Jae Myung’s Democratic Party are adding to the burden. A bill introduced June 26 by Rep. Lee Kang-il and nine co-sponsors would levy a two percent tax on the Korean revenues of foreign digital service providers only, a measure CCIA calls “facially discriminatory” and says would cost U.S. companies more than $500 million a year. Pending food-delivery legislation would let the KFTC cap fees and fine platforms up to 10 percent of sales, with criminal penalties for ignoring its orders, using thresholds “engineered to capture foreign market leaders, while explicitly shielding domestic competitors.”
Korea’s public-sector cloud market remains shut. Under a new certification regime run by the National Intelligence Service, a physical-separation rule alone disqualifies U.S. providers from an estimated 90 to 95 percent of government workloads, NFTC says, and a 2025 government AI procurement worth roughly $1.1 billion carried a “domestic companies only” clause. CCIA says a decade of such rules has cost American firms “billions of dollars of contracts.”
American content providers fare little better. Under “sender-pays” rules adopted in 2016, Korean internet providers charge each other for the traffic they send, and the country’s telecoms want foreign content firms like Netflix and Google to pay for the data Korean users request, which U.S. companies call double billing. Those rules let Korea’s three dominant internet providers charge U.S. firms “the second highest internet network fees in the world following China,” according to NFTC, and CCIA notes at least one American company, Twitch, has already exited the market. Bills to force content firms to pay outright have been proposed since 2021 but have not passed. MPA, meanwhile, flags streaming levies, statutory theatrical holdbacks, and a push to extend Korea’s broadcast ownership restrictions to American streaming services.
Seoul is also importing Europe’s speech regime. A “false or manipulated information” law that took effect July 7 designates Google, Meta, and X—alongside TikTok—for new obligations backed, in some cases, by punitive damages of up to five times proven losses. NFTC warns the rules “may target lawful political speech” and reflect a philosophy “fundamentally at odds with shared U.S.-Korea democratic values and free speech.”
CCIA’s filing devotes 14 pages to Korea, nearly twice the space it gives China. Korean companies in the United States, NFTC notes, compete under “transparent, consistent rules that are applied across the board.” American companies in Korea, the filings argue, get no such treatment. If Seoul wants to keep the benefits of its deal with President Trump, it will have to start honoring its side of it.
