375 Million KRW Fine for Violating the Information and Communications Network Act
Curly "Not Advertising Information" Legal Battle
"Randomly Issued Reward Points Expiry Notice Is Advertising"
Market Kurly was fined for sending expiration notification messages about event-issued reward points without prior consent. Kurly filed an objection, stating that "this is not advertising information."
According to Kurly's semi-annual report on the 22nd, the Broadcasting and Communications Office imposed a fine of 3.75 million KRW on Kurly in May for violating the Information and Communications Network Act. The issue arose from messages sent to customers from the end of last year to early this year, notifying them of the expiration of event-issued reward points.
The current Information and Communications Network Act stipulates that explicit prior consent from the recipient must be obtained before sending commercial advertising information via electronic transmission media. However, Kurly sent such messages to customers who had not consented to receive advertising information.
"Non-consensual event reward points... expiration notifications are advertising"
Earlier this year, the Broadcasting and Communications Office under the Korea Communications Commission conducted an investigation into Kurly regarding the 'sending of messages without consent.' The office concluded that Kurly sent messages with commercial intent and failed to clearly indicate that the information was advertising. Under the current Information and Communications Network Act, violations involving the transmission of commercial advertising information for profit can result in fines of up to 30 million KRW.
Kurly has filed an objection against the Broadcasting and Communications Office's disposition. Kurly stated, "The expiration notification messages for reward points are not advertising information intended for profit," and "we have filed an objection to the fine imposed."
However, the Broadcasting and Communications Office maintains that the messages qualify as advertising information because the reward points in question were not accumulated through individual consumer purchases but were randomly issued as part of an event, and the notifications concerned their expiration.
When an objection is filed, the administrative penalty (fine) is immediately suspended and remains so until a court decision is made. The trial proceeds as a summary trial rather than a formal one. A summary trial determines fines and other penalties through written examination without summoning the parties to court. The forthcoming court ruling is expected to focus on whether notifications about event-issued reward points constitute advertising.
Attorney Kim Ju-hee joins the board as head of legal affairs... strengthening legal response
Kurly's objection to the administrative fine came after appointing Kim Ju-hee, head of the Legal and Compliance Management Division, as a new inside director at this year's shareholders' meeting. Born in 1979, Kim graduated from Yonsei University and worked as an attorney at law firms Gwangjang and Kim & Chang before joining Kurly in 2020. Kim replaced Kim Byung-wan, Chief Growth Officer (CGO), who stepped down as an unregistered director, joining the existing board members.
Industry insiders interpret this appointment as Kurly's move to strengthen its legal expertise on the board in response to recent legal issues arising from repeated violations. In fact, in May this year, Kurly received a corrective order from the Fair Trade Commission for violating the Large-scale Distribution Business Act.
According to the Fair Trade Commission, Kurly failed to make prior written agreements on specific details such as the name, duration, and costs of sales promotion events and forced three suppliers to bear the costs of promotional events in 2020. Additionally, in 2022, while promoting the 'Growth Incentive (Sales Incentive) Expansion Policy,' Kurly entered into agreements with a total of 1,850 suppliers without substantive consultation. The Large-scale Distribution Business Act requires distributors to have prior written agreements with suppliers when conducting sales promotion events and prohibits suppliers from bearing more than 50% of the promotional event costs.
In June, the Central Regional Employment and Labor Office fined Kurly 90,000 KRW for violating the Industrial Safety and Health Act by failing to provide training when hiring workers at the Gimpo Logistics Center.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
