South Korea drafts amendment to E-commerce Consumer Protection Act

Recently, the Fair Trade Commission (FTC) of Korea announced and drafted a revision to the E-Commerce Consumer Protection Act ( hereinafter referred to as the "E-Commerce Act ") on the grounds that " in the digital economy, as the power of platforms such as Naver, Kakao, and Coupang is increasing in the digital economy , threatening factors that hinder various transaction relationships have emerged . "

The bill aims to protect the rights of consumers in accordance with the digital transaction environment, comprehensively rectify the legal system, and formulate some regulations and requirements for e-commerce platforms and e-commerce sellers.

Previously, once a consumer dispute occurred, the operators of e-commerce platforms would often be exempted from liability due to their status as intermediaries , but the FTC has developed corresponding countermeasures to prevent this situation.

That is to say, if a problem occurs after purchasing goods on websites such as Naver or Coupang , then these platforms will need to share responsibility with the seller . In addition, the bill also imposes certain restrictions on customized advertisements by online operators.

At the same time, according to the revised version of the E-Commerce Law, in order to protect consumers in C2C e-commerce, the platform must confirm the name, telephone number, address, etc. of the individual seller, and provide this information to consumers when disputes arise to assist in resolving disputes.

If the information of the individual seller is not provided or the information provided is inconsistent with the facts, the platform will also bear the responsibility together with the individual seller for the damage caused to the consumer due to the intentional or negligent act of the individual seller.

The bill has aroused strong opposition from the Korean Internet and e-commerce industries as soon as it was announced. Although this bill is formulated to effectively solve the problem of consumer harm, since e-commerce platforms are intermediaries, if they bear excessive legal responsibilities, it may have an adverse impact on the operation of the platform.

Moreover, many provisions of the bill that favor Korean consumers have affected the interests of sellers to a certain extent, and are also likely to lead to the leakage and abuse of sellers' personal information.

If the South Korean government adopts a one-size-fits-all approach to the Internet industry under the pretext of protecting consumers, it will actually cause the digital economy to regress. It is expected that the conflict between the government, which wants to pass laws as soon as possible, and online platforms will deepen. In the end, the ones who will suffer are still the sellers.

Although it is necessary to amend the business law to suit the digital age, the bill was pushed through without fully listening to industry opinions, and thus naturally failed to gain recognition from all parties in the Korean industry.

The current legislative notice period for the bill ends on April 14. During the legislative notice period, the FTC announced its plan to submit the bill to the National Assembly after fully collecting opinions from relevant ministries and stakeholders.

South Korea

consumer

Amendment Bill