FTC to revise e-commerce law in line with new purchasing standards

When Kim Ji-young – a pseudonym – purchased a designer bag for 1.96 million won ($ 1,737) through an online community in 2019, she was told delivery would take around four weeks as the bag was coming. from another country. The bag, however, never arrived and the seller was nowhere to be found.

Kim’s case is among 69,452 cases of damage to consumers during online shopping reported to the Korea Consumer Agency over the past five years.

As the retail e-commerce industry grows by leaps and bounds, the country does not have an appropriate law to legally address these damage cases, as the existing transaction law was established decades ago, in 2002, when the Internet was just starting to flourish. .

In order to update the law to encompass new forms of online transactions and to impose increased legal responsibilities on e-commerce platforms and online retailers, the Fair Trade Commission announced on Sunday that it is reviewing the Law on Consumer Protection in Electronic Commerce.

“E-commerce platforms have been at the forefront of the growth of the online retail industry by enabling the active commerce of information and goods, as well as innovation in the digital economy,” said FTC Chairman Joh Sung-wook said in a prior announcement of the legislation. Friday.

The surveillance chief pointed out that these platforms, despite their growing roles and influence in the market, shirk their responsibility to protect customers, on the pretext that they are not the direct sellers of transactions.

“Once passed by parliament, this bill will effectively address the damage to consumers and also create a market environment in which online platforms will have to compete for customer choice,” Joh said.

The bill was drafted in 21 meetings with consumer organizations, e-commerce platform operators and online retailers, the FTC said.

The bill will be submitted to the National Assembly after the watchdog collects comments and information from relevant government agencies and market players until April 14.

The online retail sector has experienced remarkable growth over the past decade, with total transaction volume more than six-fold to reach 161.1 trillion won in 2020, from 25.2 trillion won in 2010. .

But, only 58.6 percent of the 69,452 complaints of consumer damage reported during online shopping have been corrected, according to the KCA.

Breach of contract and cancellation fees accounted for 63.6% of complaints, followed by dissatisfaction with product quality and warranty service.

In the revision bill proposed by the trade watchdog, e-commerce platforms will jointly take responsibility for consumer damages with sellers.

The data showed that about 15.8% of the 69,452 reported complaints involved the nine major e-commerce platforms in Korea – 11st, Naver, Auction, WeMakePrice, Interpark, Gmarket, Coupang, Kakao and Tmon.

The review bill, according to the FTC, would stipulate the role of e-commerce platforms in a given transaction, and allow customers to separately claim compensation from the seller and the platform.

To cope with the newly imposed responsibilities, e-commerce operators will need to establish a mediation system between the seller and the buyer, and provide identification of both parties if necessary. They will also be required to inform consumers whether the products presented on the shopping platforms are advertisements or not.

Regarding damage cases that arise when shopping from foreign retailers, the FTC has said it will introduce new rules, such as requiring foreign retailers to appoint a local agent to take charge of the conflict management here.

By Jo He-rim ([email protected])


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