Hello. I am Attorney Um Sang-yoon from Cheongchul Law Firm.

Recently, the rapidly advancing generative artificial intelligence (AI) technology is bringing many changes across the entire market structure. In particular, to continually advance AI models, it is necessary to concentrate high-level technology and large-scale capital, which puts a few businesses that can satisfy economies of scale in the lead in the market. 

In fact, AI companies in the United States that have an advantageous environment for securing specialized personnel and capital are gaining an edge in the global market, and in response, the EU is announcing investments of 200 billion euros (about 300 trillion won) to foster AI, indicating that the concentration of resources has become an essential element for competition in AI.

The unprecedented trend of concentration in the AI field can increase user benefits while further strengthening the dominance of online platform companies. In other words, from a competition law perspective, AI could lead to the emergence of new dominant market players or the expansion of the dominance of existing players, which signifies the arrival of a new competitive environment for platforms.

In this regard, competition authorities in various countries, including the United States, the EU, the United Kingdom, and France, are analyzing competition threats in the AI field and expressing concerns about market monopolization. According to the analyses released by various competition authorities to date, the main factors that could hinder market competition due to generative AI are as follows.

1.  First, the development and operation of generative AI require enormous amounts of data and computing resources. For this reason, the businesses that primarily develop major AI models are usually global big tech companies equipped with high-level technology and capital, leading to an acceleration of market concentration. This is because high-performance computing resources and large-scale data are essential in the process of building AI infrastructure, developing AI-based models, and providing them as services. This structure naturally induces market concentration, reinforces monopolistic positions, and heightens the risk of limiting competition.

2. Second, barriers to market entry for generative AI are increasing. Restrictions on access to essential elements such as AI semiconductors, cloud computing, and data acquisition make it difficult for small and medium-sized enterprises and new entrants to enter the market, thus posing a risk of limited competition. In particular, the issue of data accessibility could be a key factor hindering market entry.

3. Third, the issue of AI cooperation between platforms is also emerging as a new concern in competition law. There is a possibility of collusion or abuse of dominance between platforms during the process of sharing AI models or exchanging data, and if such cooperation undermines consumer benefits or leads to price increases, it could be deemed as anti-competitive behavior.

4. Fourth, the issue of data monopolization in generative AI is also emerging as an important task. Major platform companies secure competitive advantages through extensive data collection capabilities, and by restricting access to data, they hinder market entry or monopolize data utilization, thereby raising concerns about competition limitations.

In response to the changes in the competitive environment of the AI field, there is a need to rethink the existing regulatory framework of competition law. Beyond the imperative declaration that strict legal enforcement should be carried out when AI-related businesses engage in anti-competitive conduct using enhanced market dominance, we cannot overlook the fierce competition among countries to seize the hegemony of the AI industry and the potential for innovation in the domestic industry.

In particular, we must not overlook that the AI industry could bring about unprecedented explosive innovation based on concentrated resources. Therefore, a more flexible enforcement of competition law is needed, actively considering the effects of increased utility in relevant markets, and close policy collaboration among competition authorities is necessary.

In our country, efforts have been made to legislate the 'Online Platform Law' to regulate unfair trading practices of online platforms, but it has not been finalized, and the Fair Trade Commission has established 'Guidelines for Reviewing Abusive Acts of Market-Dominant Online Platform Operators' in January 2023, thus providing a basis for law enforcement that reflects the characteristics of the platform market. 

However, how the Fair Trade Commission will secure materials related to AI technology and analyze them from a competition law perspective still remains an unresolved issue.

To respond to the technologically advanced AI market, it seems necessary to strengthen the obligations for related businesses to submit materials and recruit relevant personnel to enhance the effectiveness of law enforcement.

In conclusion, it is important to maintain a balanced perspective on the dual aspects of innovation and competition limitations brought by generative AI. 

Considering the dynamic pace of development in AI technology and the potential for market changes, a proactive approach is needed to closely monitor market conditions, preemptively review competition law issues, and respond through flexible interpretation and application of existing laws when necessary. 

Especially in the reality where global big tech companies are leading the development of AI technology, policy considerations for enhancing the competitiveness of domestic companies and creating an innovation ecosystem should also be pursued simultaneously.