This fall while the United States and China were cautiously extending their trade truce and dancing around fears of an artificial intelligence apocalypse, South Korea has kept busy pushing their own technology policy. Seoul appears intent on going its own way with a regulatory agenda that weaponizes competition and artificial intelligence despite the certain friction it introduces into the US-Korea alliance. South Korea has an invaluable role to play in America’s reindustrialization. More deliberate alignment on technology regulation, unfortunately, is now a necessary first step to re-setting the alliance.
South Korea has most recently extended its scrutiny of US technology companies, with the Korean Fair Trade Commission (KFTC)’s latest target being Google. The case against Google asserts that the company’s app store has leveraged an anti-competitive position to exert market abuses harming local South Korean competitors. The case could carry penalties upward of $600 million and impose new requirements on how Google – and other international app store managers – operate in Korea.
That scrutiny of Google comes on the heels of similar scrutiny of the U.S.-headquartered online ecommerce marketplace Coupang. The KFTC is currently seeking 10 years of business records in that ongoing case – a push that Coupang has resisted and is currently contesting in court. Those company-specific anti-trust campaigns are playing out alongside renewed legislative efforts to pass the Online Platform Fairness Act and the Bill on Fair Transactions in Delivery Platforms. Both bills would see the KFTC empowered even further and with more authority to tactically investigate and fine U.S. platforms on various fronts, including concerning payment protocols.
These platform-centric regulatory steps coincide with a broader attempt by Seoul to regulate artificial intelligence under the country’s AI Basic Act, which took effect in January 2026. The AI Basic Act aims to monitor artificial intelligence products that can be categorized as “generative AI, high-impact AI, or large-scale advanced AI systems.” The Act requires a domestic legal representative be appointed for certain types of foreign companies and it requires tiers of necessary risk management plans and approaches to AI safety. On their own, these measures may seem sensible. But when considered in light of the recent overreach and targeting of US companies by other Korean regulators, the AI Basic Act’s reach seems threatening; an added barrier to market entry and fair competition for American companies that leverage AI in their offerings.
Alliance Stakes
Collectively, these technology policy sprints – regardless of their internal logic or good intentions – have brought tensions in the US-South Korea alliance to a boil. And worse yet, those tensions are distracting from the strategic opportunity at hand for both Washington and Seoul.
All the while, the House Select Committee on China, led by Chairman John Moolenaar, sent a letter on September 30th to Secretary of State Marco Rubio voicing concerns about South Korea’s embrace of the People’s Republic of China. Moolenaar’s letter centered on “intensive leader-level engagement between Seoul and Beijing, deepening ROK semiconductor investment inside the PRC, and discriminatory treatment of American firms relative to their PRC-linked competitors in Korea” noting that those problematic trends underscore a “need for heightened vigilance.” The United States is in a long-term peacetime competition with China. The threat of China – its global reach, its asymmetric technological positioning – has shaped successive US administration strategies toward foreign policy and industrial policy. Seoul’s intensified China ties are, at best, reflective of strategic indifference, or, at worst, an exercise in foolhardy hedging. Neither is a good story for the US-South Korea alliance. And it should come as little surprise that there appears to be a link between an increase in China-friendly perspectives in Korea and the efforts of the KFTC to target US firms.
The United States and the Republic of Korea have shared concerns and ambitions. The two countries have a storied alliance as well as complementary industrial bases and markets. Alliances, though, are two-way streets. And Washington is right to want Seoul to start heading in the right direction. Ideally, a revitalized US-Korea partnership will allow for enhanced bilateral trade and investment, especially in the heavy industry sectors where the United States needs urgently to reindustrialize and expand capacity. But, first, Seoul needs to re-align its anti-trust campaigns, AI regulations, and, most importantly, ties with China.
