[Asia Economy Reporter Jusangdon] The Fair Trade Commission is accelerating the legislative process for the 'Online Platform Fairness Act' aimed at preventing unfair practices such as abuse of power against vendors on online platforms like open markets and delivery applications. The bill is planned to be submitted to the National Assembly early next year after going through the Regulatory Reform Committee, vice ministerial meetings, and the Cabinet meeting.
On the 7th, Song Sangmin, Director of the Market Surveillance Bureau at the Fair Trade Commission, stated, "The Online Platform Act is scheduled to be submitted to the Regulatory Reform Committee by the end of next week." Previously, the Fair Trade Commission completed procedures including the legislative notice period (September 28 to November 9) and the plenary meeting (November 25). Afterward, the bill will be reviewed by the Regulatory Reform Committee and the Ministry of Government Legislation, followed by vice ministerial and Cabinet meetings before submission to the National Assembly.
The Online Platform Act mandates platform operators to prepare contracts with vendors and regulates acts such as forcing economic benefits, shifting losses, interfering with business activities, and retaliatory measures. The Fair Trade Commission has been pushing for this legislation due to the increased dependence of vendors on online platforms amid the digital economy transition and the surge in non-face-to-face transactions, which have made unfair trade practices a reality. Platform operators are not subject to the Large-Scale Distribution Business Act, and the Fair Trade Act lacks provisions requiring contract provision and standard contracts to prevent disputes and improve trade practices, limiting existing policy tools to address unfair practices in the online platform sector.
The platform intermediary services subject to the Online Platform Act are services that mediate transactions of goods, etc., between online platform users and consumers. Regardless of the location of the online platform intermediary service provider, if they mediate goods, etc., between domestic vendors and domestic consumers, they fall under regulation. This applies when the previous year's sales are within 10 billion KRW or the transaction amount mediated is within 100 billion KRW. Global platform companies like Google are also included in the regulatory scope.
The Online Platform Act specifies procedural regulations and prohibited acts. First, to prevent disputes in advance, it imposes an obligation to prepare and provide contracts. Key items such as product exposure criteria, information monopoly, and responsibility distribution for damages are designated as mandatory contract terms. When changing contract contents, notification must be given at least 15 days in advance; for service restrictions or suspensions, at least 7 days; and for contract termination, at least 30 days prior notice is required. Additionally, unfair acts such as forced purchases and coercion to provide economic benefits, as well as retaliatory measures, are prohibited. A Fair Trade Commission official explained, "After the law takes effect, contracts must include the mandatory terms," adding, "Contracts made before the law's enforcement must also be revised to reflect the designated mandatory terms."
The Online Platform Act also includes provisions for the dissemination of standard contracts, the introduction of fair trade agreements between platform operators and vendors, and the establishment of an online platform specialized dispute mediation council, providing an institutional foundation for establishing voluntary trade practices and preventing disputes.
The Fair Trade Commission intends to fully reflect industry opinions before submitting the bill to the National Assembly. Director Song said, "Since the platform sector is a new industry, there are many opinions about balancing innovation and regulation, and the Fair Trade Commission shares this view," adding, "Various opinions, including legislative proposals, will emerge in the National Assembly, and we expect a balanced bill to come out through this discussion process."
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