Washington sounds alarm over 'fake news' law and its impact on U.S. firms

WASHINGTON — The U.S. State Department expressed serious concerns on Wednesday that Korea's newly-enacted online content law could undermine freedom of expression, and it warned Korea against placing excessive burdens on American companies.

In a statement, the department said the amended Act on Promotion of Information and Communications Network Utilization and Information Protection — also referred to as the Network Act — which took effect Tuesday, should not be used as a means to censor free expression.

The U.S. Department of State also said it hoped for continued dialogue with key stakeholders, especially U.S. technology companies, so that the new law's rollout would not chill free speech, and that Washington would keep working to build a free and open digital environment for everyone.

The Network Act is built around punitive liability for spreading false or manipulated information. Someone who knowingly harms another with false or manipulated content can be ordered to pay up to five times the damages, and repeated distribution of such information can draw a fine of up to 1 billion won ($664,000). At home, the law has split opinions between those who call it necessary to curb fake news and those who warn it could become a gag law that suppresses free speech.

The department's call for close contact with U.S. firms reflects its view that the law could be turned into a tool to regulate American companies. The law imposes obligations to curb false information on platform operators with more than 1 million daily users. Korea's media regulator, the Korea Media and Communications Commission, has designated nine such operators, four of them foreign: Google, Meta, X and TikTok.

Washington has raised similar objections before. When the amendment cleared the National Assembly in December of last year, the State Department said it “negatively impacts the business of U.S.-based online platforms and undermines free expression,” and said Korea should not erect “unnecessary barriers” to digital services and that the United States opposes censorship.

In April, Under Secretary of State for Public Diplomacy Sarah Rogers visited Korea and reportedly raised the same concerns in a meeting with the Foreign Ministry's ambassador for public diplomacy.

Some observers worry the Network Act could become another flashpoint in Korea-U.S. relations. Concern has already grown that a dispute over Coupang, the U.S.-listed company at the center of a massive personal data breach in Korea, could weigh on trade and security ties between the two countries.

Kang Kyung-wha, Korea's ambassador to the United States, addressed the Coupang issue at a briefing for Korean correspondents in Washington on Wednesday. “There is a shared understanding between the two governments that we should manage it stably so it does not burden Korea-U.S. relations,” she said.

“Through continued consultations with the U.S. side, we will explain our government's position clearly and consistently.”

BY KANG TAE-HWA [[email protected]]