The FTC proposes new contractual clauses between online platforms and vendors, and stronger dispute resolution mechanisms.
A law against unfair trade practices: On 28 September 2020, the Korean Fair Trade Commission (FTC) announced a draft bill introducing rules to tackle unfair trade practices on online platforms. The bill is under consultation for 40 days, until 9 November 2020, after which the FTC plans to submit it to the National Assembly having considered stakeholders’ feedback.
What is proposed: The proposals require platforms to conclude contracts with vendors to prevent disputes from arising. Platforms wishing to change contract conditions or terminate a service would be required to give at least 15-days notice. The law introduces a standard contract and a ‘dispute mediation council’. Penalties are up to KRW1bn (USD854k) and cannot be more than twice as much as the damage incurred by the victim.
An increasingly important part of the economy: The combined value of online shopping transactions in Korea grew from KRW25.2tn (USD25.5m) in 2010 to KRW135.3tn (USD115.5m) in 2019. The FTC is increasingly concerned about unfair trade practices online, given the increasing importance they have in the economy.
