Fair Trade Commission to Strengthen Platform Operators' Responsibility
Joint Liability Imposed on Tenant Companies for Selling Hazardous Products
[Sejong=Asia Economy Reporters Haeyoung Kwon and Sangdon Joo] The government is pushing for measures to directly sanction online shopping platforms like Coupang if they fail to distinguish between direct sales products and intermediary products, causing consumer confusion and damage. If a mask seller is caught selling uncertified masks or hazardous items through the platform, the platform operator will also bear joint responsibility, and fines will be imposed for false or exaggerated advertisements that mislead consumers.
According to industry sources on the 1st, the Fair Trade Commission (FTC) is finalizing a comprehensive revision of the "Act on Consumer Protection in Electronic Commerce, etc. (E-Commerce Act)" containing these provisions and plans to release it before the Lunar New Year holiday. The FTC, undertaking a major overhaul for the first time in 19 years since the law was enacted in 2002, is currently gathering opinions from related industries.
The core of the FTC’s E-Commerce Act revision is to strengthen the joint liability of platform operators. Under the current law, platforms are exempt from liability as long as they notify on their homepage that they are "communication sales intermediaries and not parties to the communication sales," a practice criticized for shifting consumer damage responsibility solely onto the merchants operating on the platform.
The FTC plans to reorganize communication sales under the existing legal framework into electronic commerce and newly introduce the concept of online platforms. In particular, the revision includes provisions that require platforms to bear joint responsibility with merchants when ▲ they operate both direct sales and intermediary transactions without distinguishing or when the displayed information is false ▲ the description of delegated tasks such as payment receipt and payment services is inaccurate ▲ supply of goods, contract issuance, advertising, and other important tasks like order acceptance are conducted under the platform operator’s name causing damages ▲ and when necessary measures are not taken for hazardous goods transactions within platforms of a certain scale or larger.
The FTC stated, "We are preparing amendments to the E-Commerce Act to significantly strengthen the consumer protection responsibilities of platform operators," but refrained from disclosing specific details. An FTC official said, "The details have not been finalized as the discussions are still ongoing."
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