"Subscription Cancellation Blocked"... Fair Trade Commission Begins Sanctions on Coupang, Kurly, and Naver

Sending Review Reports to Paid Membership Operation Platforms
Pointing Out Violations of the Electronic Commerce Act for 'Interfering with Mid-Term Contract Termination'

The Fair Trade Commission (FTC) has initiated sanctions over suspicions that online platforms such as Coupang, Market Kurly, and Naver prevented consumers who joined their paid memberships from canceling midway.

According to industry sources on the 2nd, the FTC recently sent review reports containing sanction opinions (equivalent to a prosecutor's indictment) regarding violations of the Electronic Commerce Act by Coupang, Market Kurly, Naver, and others.

Specifically, the FTC is reportedly concerned that these platforms, while operating paid subscription services, did not refund the difference to consumers who requested early cancellation.

For example, Coupang operates a paid service called 'Wow Membership,' and it was pointed out that even if consumers who subscribed requested early cancellation, they were not refunded the difference. In the case of Wow Membership, if there is no usage history within one month after subscribing, the amount for the following month can be refunded; however, if there is usage history during this period, the difference is non-refundable.

Market Kurly and Naver’s paid memberships designate the withdrawal period as within 7 days from the day after the payment date, and only consumers who request a refund without any usage history during this period receive a full refund.

The FTC reportedly views these practices as violations of the Electronic Commerce Act and has begun sanction procedures. Earlier, the FTC conducted on-site investigations of Coupang, Market Kurly, and Naver in May. In August, review reports were also sent to three online video service (OTT) providers?Netflix, Wavve, and Watcha?as well as music platforms like Bugs and Spotify.

The platform operators argue that restrictions on the withdrawal period are unavoidable. An industry insider explained, "As online subscription services become widespread and competition for customer acquisition intensifies, the number of 'cherry pickers' (consumers who have low purchase performance but maximize various additional benefits or services provided by companies) is increasing, so platforms are concerned about reducing the demand that leaves." They added, "For this reason, global platforms such as Google and Netflix, as well as OTT and paid music memberships, have taken similar measures to allow full refunds only within a certain period for consumers without usage history."

Online platforms that received the FTC’s review reports plan to clarify their positions if investigations regarding this matter proceed in the future.