Why DeepSeek Faces South Korean Regulatory Blocks

The global AI sector faces increasing regulatory scrutiny as nations grapple with the implications of cross-border AI deployment.

Concerns about data protection, national security and technological sovereignty have prompted governments to implement restrictions on AI applications.

These tensions have intensified as Chinese technology companies demonstrate capabilities matching or exceeding those of US counterparts and regulatory landscape spans from EU's AI Act to individual national responses, creating a complex framework for AI deployment.

Now, South Korea's Personal Information Protection Commission has suspended new downloads of DeepSeek, citing concerns over data protection compliance.

DeepSeek downloads halted as Korean regulators press for compliance 

South Korea’s government agency said the AI model will become available again to South Korean users when "improvements and remedies" align with the country’s personal data protection laws before the service can resume availability on digital distribution platforms.

The suspension took effect on Saturday evening, affecting both Apple's App Store and Google Play distributions.

Concerns about DeepSeek’s data policies and cyber attack

Despite DeepSeek skyrocketing to the top spot in global app stores, a day later, the company’s rise in popularity was potentially stifled by a reported large-scale cyber attack that forced it to hold off new customers from outside of China from registering to use the app.

Toby Lewis, Head of Threat Analysis at Darktrace, says: “The most probable being simply a victim of their own success – what we in tech circles call the 'Slashdot effect,' where their infrastructure buckled under unexpected user demand following their viral moment on the App Store.”

Dan Schiappa, Chief Product Officer at Arctic Wolf, adds: “People are already worried about how much data social media firms have access to, so just imagine what the risks could be with Chinese foundational models being trained on all your data.”

“Considering DeepSeek limited its registrations due to a cyber attack, you have to wonder whether it has the appropriate security and policies in place to maintain privacy. Likewise, China could continue its trend of IP theft and replicating US and European technologies.”

Rapid DeepSeek adoption triggers security concerns 

DeepSeek gained significant traction in South Korea, reportedly accumulating over one million weekly users and reaching the top position in mobile application rankings.

However, the swift market penetration prompted scrutiny from South Korea's government agencies, which moved to prohibit staff from installing the application on work devices.

Acting President Choi Sang-mok says that DeepSeek represents a “shock” that could impact the country's industries, beyond AI.

However, the regulatory intervention has not affected existing users, who maintain access to the service through previously downloaded applications or DeepSeek's web interface.

Variety reports that earlier this month, a Chinese government spokesperson said: “The Chinese government attaches great importance to data privacy and security and protects it in accordance with the law.

“We have never asked and will never ask any company or individual to collect or store data against laws.”

Global regulatory response to Chinese AI advancement 

The regulatory action in South Korea aligns with similar measures implemented across the Asia-Pacific region and beyond.

Italy
Italy’s Data Protection Authority was among the first to block DeepSeek, citing a lack of transparency on data collection and storage.

The country's involvement marks a broader development, as the regulator previously took action against ChatGPT in 2023 and this precedent suggests increasing scrutiny of AI platforms' data handling practices in European markets.

Taiwan and Australia
Additionally, Taiwan and Australia have enacted bans on DeepSeek's installation on government devices.

US
Meanwhile in the US, federal legislators have proposed restrictions on DeepSeek's use in government operations, citing surveillance risks.

State administrations in Texas, Virginia and New York have already implemented protective measures for government employees.

Technological implications for AI development 

DeepSeek's LLM demonstrates significant computational capabilities and cost reductions compared to other AI models – and this efficiency in resource utilisation also raises questions about the substantial investments being directed towards AI infrastructure development in the US and other markets.

“During the service suspension period, we will closely examine the DeepSeek AI model’s personal data processing to ensure better compliance with the country’s privacy law and address concerns about data privacy,” Choi Jang-hyuk, PIPC Vice Chair, said at a press conference.

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