Fair Trade Commission Urges Platforms to Become 'Big Brother,' Industry in Uproar

Controversy Over the Amendment to the Electronic Commerce Act Emphasizing 'Consumer Protection'

The Fair Trade Commission (FTC) has caused an uproar in the related industry with its proposed full revision of the Electronic Commerce Act. The revision effectively forces platform companies, which have been strengthening their mediation roles, to become a ‘Big Brother’ in the name of consumer protection. Platforms that have minimized the collection of personal information now face the situation of having to ask users for key information again to maintain their services. The controversy is expected to continue as the possibility of personal information infringement increases.

According to the platform industry on the 8th, the most controversial provision in the FTC’s proposed amendment to the Electronic Commerce Act is Article 29, ‘Consumer Protection in Peer-to-Peer Electronic Commerce.’ The FTC specifies that if the seller of goods through an online platform is an individual rather than a business operator, the platform must verify the individual seller’s name, phone number, and address, and provide this information to consumers in case of disputes between the individual seller and the consumer.

◆Government demands startups to become Big Brother=If this provision becomes reality, C2C platforms will have to additionally secure users’ personal information and intervene in disputes by providing this information to the involved individuals. For example, Danggeun Market, which currently allows sign-up only with a phone number, would have to secure users’ real names and addresses. Considering that Danggeun Market has 14 million monthly users, the government is essentially demanding it to become a ‘Big Brother’ holding massive personal information. A Danggeun Market representative lamented, "If the legislation passes, we will have to additionally secure users’ real names and address information, and require real names, phone numbers, and addresses from new users as well."

Not only Danggeun Market but numerous startups based on e-commerce will have to collect additional personal information. Most startups have minimized consumer personal information collection in line with global trends. Many C2C platforms allow simple sign-up with just a phone number or name. An industry insider from the startup sector pointed out, "We have proactively implemented various consumer protection measures such as using safe numbers to protect personal information, but these efforts are being ignored, and regulations are being pushed in a direction that shifts responsibility onto consumers."

There is also criticism that provisions holding platform operators jointly responsible with sellers could force platforms to intervene in sellers’ businesses, effectively making them ‘Big Brother.’ An open market industry insider said, "Among the vendors, many are small and micro-businesses, and if joint responsibility is imposed, companies will inevitably take various measures to reduce risks."

◆Concerns over personal information infringement grow=Concerns over personal information infringement are also significant. Providing an individual’s real name, phone number, and address directly to the transaction counterpart does not necessarily resolve disputes, and the information obtained by individual users during this process is not automatically destroyed after the transaction ends. A C2C platform industry insider expressed concern, "If personal information is maliciously misused, it could lead to serious situations threatening the safety of innocent users." Although consumer protection is cited in peer-to-peer transactions, it could rather escalate conflicts caused by personal information infringement and cause social unrest.

Jung Mina, Policy Director of the Korea Startup Forum, said, "According to the legal text, if problems arise due to intentional or negligent acts, the individual buyer should be given the individual seller’s name, address, and phone number, but we need to discuss with the FTC what the intention behind this provision is." She added, "Concerns over personal information infringement are quite significant, so we plan to request an authoritative interpretation from the Personal Information Protection Commission."