South Korea to revise e-commerce trade law

Both platforms and merchants may be held responsible for defective goods.

South Korea’s antitrust regulator Korea Fair Trade Commission (KFTC) is revising the Electronic Commerce Act in response to the rapid growth of online retail and the acceleration of digital economy, according to a press release.

In order to adapt to the current situation of e-commerce, the bill will first modify the relevant terminology and system from mail order to electronic commerce. Electronic commerce businesses will be classified and defined as either online platform operator, online platform business user, or business with its own website.

The bill also aims to improve safety and options for consumers engaging in electronic commerce. For instance, consumer safety in electronic commerce will be promoted through measures like the obligation to cooperate when issuing a recall of dangerous goods.

For transparency, the bill will push platforms to distinguish search results from advertisements, show how ranking on results pages are determined, disclose information on user reviews, specify personalized ads, and give options to choose nonpersonalized ads.

The bill also stated that platform operators will take joint responsibility with merchants if the consumer misunderstands the operator as the party directly involved in the transaction, for using its name for indication, advertising, supply, and delivery of contract even when consumer damage has been caused by intent or negligence of the platform business user.

Both will also be responsible if consumer damage has been caused by intent and negligence of the platform operator when directly performing its responsibilities for the transaction process, such as registration of offer, settlement, receipt of payment, and refund of payment.

The bill will also improve the utilization of the Temporary Suspension Order System and introduce measures like the Consent Resolution System and Electronic Commerce Dispute Mediation Committee for quicker and more effective consumer damage prevention and relief.

If the National Assembly passes the bill, KFTC expects that consumer damage frequently seen in everyday online transactions will be effectively prevented and relieved.

The watchdog has announced advance legislation notice, scheduled to be implemented for 40 days from 5 March to 14 April. KFTC plans to submit the bill to the National Assembly after collecting enough opinions from relevant ministries and stakeholders during the period.