"Out of Stock" ... Mask Seller Caught Reselling at Higher Prices

Fair Trade Commission Announces Results of On-Site Investigation of 'Mask Online Distribution Companies'

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[Sejong=Asia Economy Reporter Joo Sang-don] A distribution company that unilaterally canceled consumer orders citing out-of-stock despite having mask inventory and then raised prices to resell was caught by the Fair Trade Commission.

The Fair Trade Commission announced on the 17th that it detected legal violations by three companies through inspections in the online distribution sector.

Previously, the Fair Trade Commission, in response to unstable mask supply due to the spread of the novel coronavirus infection (COVID-19), has been jointly inspecting unfair practices such as collusion and hoarding with related ministries including the Ministry of Food and Drug Safety. Separately, the Fair Trade Commission conducted on-site inspections of four online shopping malls with concentrated consumer complaints from February 4 to 6, and since the 7th, has been conducting on-site investigations targeting 14 tenant sellers with high order cancellation rates and frequent consumer complaints. So far, about 60 investigators have been deployed to investigate 15 mask-selling companies.

As a result of the inspections so far, three sellers were found to have unilaterally canceled consumer orders citing out-of-stock despite having mask inventory, then raised prices and resold the masks. According to the Fair Trade Commission, Seller A unilaterally canceled a total of 119,450 mask orders (estimated, based on the number of masks) on Gmarket from the 20th of last month to the 4th of this month. Afterwards, the seller raised prices and sold to other consumers.

The Act on Consumer Protection in Electronic Commerce, etc. stipulates that "necessary measures must be taken to supply goods, etc. within three business days from the date the consumer pays all or part of the payment (Article 15)." Also, if it is difficult to supply the goods, the reason must be notified to the consumer. The Fair Trade Commission views that the three companies detected this time violated the Electronic Commerce Act by receiving payment but falsely claiming "out-of-stock" and reselling to other consumers. Violations of Article 115 can result in sanctions such as a one-month business suspension for the first offense, three months for the second, and six months for the third.

A Fair Trade Commission official said, "The Fair Trade Commission will thoroughly review violations of the Electronic Commerce Act and impose strict sanctions such as corrective orders if violations are confirmed. In addition, to prevent such acts from occurring, we will continue inspections by cooperating with major online shopping malls and monitoring consumer complaint trends in real time."