The Korean government is continuing to actively develop data center-related policies.  On December 29, 2022, the a joint group of government agencies published the “Development Plan for Digital Platforms¹,” and on December 28, 2022, the Ministry of Science and ICT (“MSIT”) published the 2023 MSIT Work Plan, which includes plans for data centers.  We discuss each in more detail below.

1.   The Development Plan for Digital Platforms
 

On December 29, 2022, the government published the “Development Plan for Digital Platforms” jointly developed by the MSIT, the Korea Communications Commission, the Korea Fair Trade Commission, Personal Information Protection Commission, and other agencies.

This Development Plan follows the Korean president’s vision of creating an innovative digital ecosystem for “free digital citizens,” and provides detailed plans to regulate government stakeholders, businesses, and market participants in the digital platform industry as well as to promote the industry and support the growth of platforms and other market participants.  In particular, the Development Plan includes the following plans with respect to data centers.

1)   Expansion of disaster management obligations to major data center operators and value-added telecommunications service providers
 

In the Development Plan, the government sets forth its plan to expand the scope of the disaster management system by adding certain data center operators (“DCOs”) and value-added telecommunications service providers (“VSPs”) to the list of major broadcasting communications service providers subject to disaster management obligations.  Related legislation passed the National Assembly on December 8, 2022 as part of an amendment to the Framework Act on Broadcasting Communications Development (“Framework Act”) in response to the Pangyo data center fire; and the government appears to be reciting the legislation as a demonstration of its intention to implement the legislation.

The thresholds for DCOs and VSPs to be deemed as major broadcasting communications service providers will be specified in the Presidential Decree, and it is expected that the factors will include the number of users per day and traffic share for VSPs and the facility size and sales for DCOs.
 

2)   Survivability and stability measures of DCOs and VSPs
 

To create a safe digital platform industry, the government plans to establish policies to improve survivability and stability measures of DCOs and VSPs.  Legislations related to this plan also passed the National Assembly on December 8, 2022 in response to the Pangyo data center fire, and are summarized below, and the government appears to be reciting the legislations as a demonstration of its intention to implement these legislations:
 

• Amendment to the Framework Act:  Before the amendment, the MSIT set and implemented a master plan for the management of disasters in broadcasting communications in order to prevent and quickly respond to disasters or defects in the services of major broadcasting communications service providers.  This plan will now include “physical/technical protective measures, such as decentralization and redundancy of servers, storage, networks, and power supplies.”

• Amendment to the Act on Promotion of Information and Communications Network Utilization and Information Protection (“Network Act”):  Before the amendment, a provider of information and communications services that operates and manages a data center for a third party’s provision of information and communications services was required to take protective measures to ensure the stable operation of such data centers.  The amendment expands the scope of this protective measure obligation to those that directly operate and manage data centers to provide their own information and communications services, and also requires providers of information and communications services who leased data centers to cooperate with data center operators in implementing protective measures.
   

3)   Regular inspections on service stability
 

The government further plans to promote policies to conduct regular inspections on service stability for certain VSPs.  This policy was also reflected in legislations that passed the National Assembly on December 8, 2022 in response to the Pangyo data center fire.  Namely, the Telecommunications Business Act (“TBA”) previously provided that VSPs that meet a certain threshold (daily average of 1 million users and traffic share of 1% or more) are required to “secure service stability.”  The amendment additionally (i) requires the VSPs meeting such threshold to submit materials to the MSIT once a year on its plans to secure service stability and the status of implementation of such measures, and (ii) authorizes the MSIT to request such VSPs to submit materials on the status of implementation in the event of service failure or suspension such as slowdown of transmission speed.
 

4)   Relief for user harm
 

The government also plans to pursue policies to provide users with rapid relief from service failures, such as enabling quick notification to users in case of service failures of platforms and providing information on damage relief.  Further, the government emphasized that platforms providing societal infrastructure must be held to a higher standard of stability, as failure of such services can severely inconvenience economic and societal activities of the entire country.
 

2.   The 2023 MSIT Work Plan 
 

On December 28, 2022, the MSIT published the 2023 MSIT’s Work Plan, and the issues relating to data centers are as follows.

1)    Promoting the “Digital Service Stability Act“ (tentatively titled)
 

The MSIT announced that it plans to promote enactment of the “Digital Service Stability Act” (tentatively titled), which would consist of and reorganize the provisions in the Network Act that relate to disaster responses.  According to the related press release, the government clarified that this Digital Service Stability Act would generally regulate service stability of digital infrastructures, and would be broader in scope than the amendments that passed the National Assembly on December 8, 2022 (see above section 1.1-1.3).
 

2)   Comprehensive Plan to Secure Digital Service Stability
 

The MSIT also announced that it will prepare and begin implementing the “Comprehensive Plan to Secure Digital Service Stability” in the first quarter of 2023 to establish foundations for the stable and seamless operation of digital services.

The Comprehensive Plan will reflect the response measures implemented by the companies affected by the Pangyo data center fire and their future plans for additional measures, expert/industry opinions on how to strength disaster management at each stage, and proposed amendments to the laws and regulations.
 

3)   Comprehensive Support Plan for the Cloud Industry
 

Lastly, the MSIT announced that it will establish the “Comprehensive Support Plan for the Cloud Industry” in the second half of 2023, which would include expanding use of cloud services, vitalizing the SaaS ecosystem, and data center support.  Continued monitoring will be necessary for additional details on the data center support aspect of this plan.
 

As demonstrated by the above legislations and policy plans, the government is planning to actively regulate digital platforms to ensure reliability for the users in light of the Pangyo data center fire.  These legislations and policies are likely to impact both data center operators as well as the users, and it will be important to continue to monitor government trends in this area.

¹   The government explained that there is no specific legal definition for the term “digital platform” yet as the definition and scope of the term continues to change and expand based on the advancement of relevant technologies and services, and stated that infrastructure services such as cloud or data platforms may be included.

[Korean Version]