In the rapidly transitioning digital economy, the importance of 'connectivity,' 'compatibility,' and 'convergence' for universal access has become increasingly emphasized. This so-called 'open innovation' is essential for survival and sustainable growth in markets and industries. In this context, the principle that 'isolated innovation becomes obsolete while connected convergence evolves' holds significant relevance for innovation, competition, and enhancing consumer benefits in this hyper-connected era.
Particularly in South Korea, which stands at the center of the global digital economy, ensuring interoperability—the ability of different systems, products, or services to exchange data and share information seamlessly—is not merely a choice but a critical consideration. This consideration should extend beyond technical aspects to encompass the legal and policy guarantees that permeate the entire market and industry.
Guaranteeing interoperability can serve as a competitive policy tool to lower market entry barriers and promote innovation, going beyond mere technical compatibility. The recent policy report 'Data and Competition' published by the Fair Trade Commission highlights that hindering interoperability can be a key indicator of abuse of market dominance, which aligns with this understanding.
This reflects the recognition that refusing to provide Application Programming Interfaces (APIs), which enable different software to communicate and exchange data, or making it difficult for competitors to operate essential functions of their products or services, can lead to a closed digital ecosystem that restricts competition, potentially violating fair trade laws.
In markets where various products and services are interconnected—such as mobile operating systems, payment systems, app ecosystems, and wearable IoT devices—restricting access to core functionalities can create entry barriers that are difficult for competitors to overcome through technological prowess or product competitiveness. If such access restrictions are maintained or strengthened, even if competitive products or services are developed, it becomes challenging to provide consumers with equivalent functionalities and conveniences, limiting further innovation from providers. Moreover, this hindrance to innovation can raise concerns about structural limitations on competition, potentially leading to the exit of providers from the market in the long term, which is a serious issue that should not be taken lightly.
Furthermore, ensuring interoperability is not solely focused on promoting continuous innovation and competition among providers; it directly impacts consumer benefits. Reflecting on the inconveniences we faced while charging smartphones before the USB-C standard was established, we can appreciate the consumer benefits brought about by compatibility and interoperability. However, this experience is just a small example of the broader consumer benefits resulting from ensuring interoperability.
Interoperability has already demonstrated its effectiveness in enhancing consumer benefits, particularly evident in the digital economy. In this regard, the ability to message across different operating systems, share files in real-time between various digital devices, easily transfer accumulated data such as photos, contacts, and schedules during platform transitions, and connect and control various smart home devices are all changes in daily life that we now take for granted, resulting from the assurance of interoperability.
However, it is essential to establish institutional mechanisms for ensuring interoperability with the understanding that the goal is not to uniformly open all functionalities of products and services. The core objective of ensuring interoperability is to enable the connection of products and services from different providers within the necessary scope and level required for effective competition.
By securing what is termed 'competitive connectivity' while simultaneously protecting personal information, security, and incentives for innovation, we can expect to promote market entry for providers, enhance consumer benefits, and substantially expand consumer choice in the domestic market and industry.
* This article has been translated by AI.
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