Government and National Assembly Intensify Pressure on 'Online Sales' Dark Patterns Across the Board

National Assembly Political Affairs Committee Prepares Amendment to Dark Pattern Act
Broadcasting Commission Recommends Changes to OTT and Streaming Service Subscription Cancellations
Industry Impact Expected Upon Legislation... Direct Hit to Google, Coupang, and Others

#. Ms. Kim Ji-young (pseudonym) recently signed up on a site after seeing an advertisement for '30 days of free movie viewing' but had an unpleasant experience. She joined after being told that withdrawal during the trial period was free, but when she tried to cancel, she could not find the cancellation page no matter how much she searched the site. After some time, she eventually received a payment notice for conversion to a paid service.

This kind of online trickery that mocks consumers is called a so-called dark pattern. The so-called 'Dark Pattern Act (Partial Amendment to the Electronic Commerce Act)' to regulate dark patterns is in the final stages of legislation.

The National Assembly's Political Affairs Committee integrated five bills related to the Dark Pattern Act on the 23rd of last month and prepared a revised alternative. Among the five bills, including the one first proposed by Representative Hong Jeong-min in March 2021, the revised bill was centered on Representative Song Seok-jun's proposal. The revised bill is awaiting approval by the Legislation and Judiciary Committee and the plenary session of the National Assembly.

This bill was prepared to catch six types of dark patterns that are difficult to regulate under current law: hidden renewals, sequential price disclosure, incorrect hierarchy, pre-selection of specific options, cancellation/withdrawal obstruction, and repeated interference. The Fair Trade Commission, which led the legislation, announced a voluntary management guideline for dark patterns in July and has been rushing legislation to eliminate regulatory blind spots. The internet industry has opposed the legislation citing marketing autonomy and platform competitiveness, but a consensus that consumer protection should come first has formed inside and outside the National Assembly and government.

After the law passes, it is expected to put a brake on the widespread 'free trial marketing' in the industry. There was a significant difference of opinion between the industry and the National Assembly on whether re-consent is required when a free trial converts to a paid subscription or when prices increase, even if prior notice was given. The issue was whether this should be considered a separate contract. The revised bill specifies that even if the business obtains prior consent from the customer, separate consent must be obtained at the time of change.

If the bill passes the National Assembly, it is expected to have a significant impact on the industry. According to a 2021 survey by the Korea Consumer Agency, at least one dark pattern was found in 97% of 100 domestic e-commerce mobile applications (apps). A National Assembly official explained, "There were many complaints from consumers urging the legislation of the Dark Pattern Act," adding, "The accumulated dissatisfaction has led to legislation."

Even if legislation becomes visible, the impact on domestic IT giants such as Naver and Kakao is expected to be limited. Naver, which has taken preemptive measures, is discussing dark pattern prevention measures through its self-regulatory committee and plans to publish a report including these measures next year. Kakao also has dedicated staff. The situation is different for foreign companies. An IT industry official said, "Foreign companies like Google and Coupang are anxious and are responding through associations," adding, "Naver and Kakao are rather relaxed." Small and medium internet companies, shopping malls, and app operators are also expected to be major targets of regulation.

The Korea Communications Commission (KCC), which had a subtle turf war with the Fair Trade Commission over leadership in dark pattern regulation, is also accelerating industry crackdowns. The KCC has argued that since dark patterns fall under electronic commerce and digital services, the priority application of the Telecommunications Business Act and the KCC's jurisdiction over sanctions are justified. The KCC's Value-added Communications Investigation Support Team announced last month that it recommended 18 services, including online video services (OTT) and music streaming platforms, to redesign their services to make cancellation easier.