[Editorial] The World’s First AI Regulation Law Takes Effect: Regulation Must Not Get Ahead of Innovation
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Writer
CFE
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In January 2026, Korea will become the first country in the world to fully enforce a comprehensive artificial intelligence (AI) regulation law. The government describes this as an institutional foundation for fostering the AI ecosystem and securing trust, but amid intensifying global technological competition, a sober review is needed as to whether being the “world’s first regulator” is truly a desirable choice.
The AI industry is still in an early stage, with technological pathways and methods of application evolving rapidly. Introducing comprehensive and preemptive regulation for such an industry is little different from putting the brakes on innovation without being able to predict its direction. Regulation is most effective when it operates minimally after risks have actually materialized; when mere possibilities themselves become the object of control, the side effect is often industrial contraction.
In particular, the Framework Act on AI requires businesses to implement risk management, duties of explanation, documentation, and supervisory systems based on the broad and abstract concept of “high-impact AI.” This places a far heavier burden on startups and small and medium-sized enterprises than on large corporations. In reality, many AI companies still do not have legal compliance systems in place, so if the law takes effect first, innovation will inevitably be delayed and investment will shrink.
A disconnect from international trends is also concerning. Even the European Union (EU) is applying AI regulation in stages, with high-risk AI regulations deferred for several years. The United States and Japan have chosen strategies centered on guidelines and self-regulation rather than legislation in order to strengthen industrial competitiveness. While major competitor countries are calibrating the pace of regulation, Korea moving ahead alone with regulation could send a disadvantageous policy signal in the global AI race.
The government says it will ease the burden through grace periods for administrative fines and support measures, but the impact that the very existence of regulation has on corporate decision-making is not offset by a deferment period. From the moment the law takes effect, companies have no choice but to take regulatory risk into account, and this operates in a direction that avoids experimentation and challenge. Regulatory uncertainty is itself a cost.
The competitiveness of the AI industry is not secured by introducing regulation quickly. The Center for Free Enterprise (CFE) urges that in the subordinate legislation and enforcement process of the Framework Act on AI, industrial promotion should be given top priority and regulations should be designed to be minimal, flexible, and gradual. Ex post regulation that holds actors accountable when clear harm has occurred, along with an innovation environment based on market autonomy, is the realistic path to becoming an AI powerhouse.
More important than the title of being the world’s first AI-regulating nation is making policy choices that ensure AI innovation does not leave Korea. What is needed now is not the speed of regulation, but the direction of policy.
2025. 12. 26.
Center for Free Enterprise (CFE)
Original title: [논평] 세계 최초 AI규제법 시행, 혁신보다 규제가 앞서선 안 된다
Author: Center for Free Enterprise (CFE)
Date: 2025-12-26
Source: https://www.cfe.org/bbs/bbsDetail.php?cid=comment&pn=1&idx=28448