Resolution on Administrative Orders and Fines at the Full Meeting on the 29th
Excessive 50% Penalty... Unfavorable Fare Plans for Users
"Strict Measures Regardless of Domestic or Foreign Operators"
Global software company Adobe has been fined 1.3 billion KRW by the Korea Communications Commission (KCC). This was due to operating a pricing plan unfavorable to users, such as imposing excessive penalties for early termination of services.
On the 29th, the KCC decided at a plenary meeting to impose corrective orders and a total fine of 1.309 billion KRW on Adobe.
Adobe was criticized for restricting users' right to cancel by requiring excessive penalties when users terminated services early and not refunding prepaid fees.
Since August last year, the KCC conducted a fact-finding investigation into Adobe’s service fee operation and refund policies for services sold online through the web.
Adobe imposed an excessive penalty of 50% if users canceled after 14 days of the contract under the 'Annual Contract Monthly Billing' plan, and did not refund the entire prepaid annual fee in the case of the 'Annual Contract Prepaid Payment' plan.
Adobe Flash Player
The KCC compared Adobe’s case with similar domestic and international services and comprehensively investigated the appropriateness of penalty charges and the status of refund-related complaints.
Accordingly, the KCC decided to impose a corrective order and a fine of 876 million KRW on Adobe for unilaterally operating a pricing plan that restricts users' right to cancel by making it difficult to terminate the service.
Additionally, Adobe notified users on the initial online contract screen with ▲'A fee will be charged if canceled after 14 days of subscription ⓘ', requiring users to go through four steps, including moving the mouse cursor over the ⓘ icon, to learn about the 50% penalty charge, and ▲'Cancellation possible anytime without fee ⓘ', which required users to move the mouse cursor over the ⓘ icon to realize that refunds are not available after 14 days (monthly contract).
Therefore, the KCC imposed a corrective order and a fine of 433 million KRW, requiring Adobe to clearly and easily explain and notify users of refund and penalty charge information on the initial contract screen.
Chairman Lee Dong-kwan stated, "We strictly enforced the measures under the principle that there is no distinction between domestic and foreign businesses in complying with the legislative intent and legal obligations," and added, "We will continue to make efforts to prevent damages to digital platform users."
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