Only Two-Year Mobile Phone Repair Warranties in Korea Criticized
Double Regulations on Early Morning Supermarket Deliveries and Cinema Advertising
The Korea Chamber of Commerce and Industry (KCCI) announced on August 10 that it has identified 24 unreasonable regulations felt by the public in their daily lives and proposed improvements to the government.
This proposal is part of the KCCI's ongoing "New Growth Series," which has been planned and announced continuously this year to promote private sector-led regulatory reform. It follows the previous proposals on "New Industries, Old Regulations" (54 cases) and "Manufacturing Site Regulations" (55 cases), making this the third installment. This time, 24 regulations closely related to people's everyday lives were selected and proposed to the government.
The proposal first includes the insurance industry regulation that restricts the provision of extended warranty services for mobile phones. While automakers and home appliance retailers can independently offer extended warranty services, telecommunications companies are not allowed to provide paid warranty extensions after the manufacturer's standard warranty period (typically two years) ends. This is because such services are classified as insurance products, and only those with insurance sales qualifications are permitted to offer them.
The KCCI stated that improvement is necessary, especially when considering examples from advanced countries. In the United States and Japan, extended warranty services offered by telecommunications companies are not regarded as insurance. As a result, consumers can pay for warranty extensions even after the free warranty period ends, reducing their repair costs. The proposal therefore requests an amendment to the Enforcement Decree of the Insurance Business Act, allowing telecommunications companies to provide extended warranty services as well.
The KCCI also proposed easing online business restrictions for large retail stores. In particular, restrictions on early morning delivery by large supermarkets are cited as a typical regulation affecting daily life. The current Distribution Industry Development Act imposes two mandatory closure days per month and limits business hours from midnight to 10 a.m. for large supermarkets, during which online orders and deliveries are prohibited. This regulation is out of step with the reality where online grocery shopping and early morning deliveries have become commonplace, and for over a decade, only large supermarkets have faced online business hour restrictions, raising ongoing concerns about fair competition.
In fact, a 2022 KCCI survey showed that 68% of respondents supported relaxing these business restrictions. The proposal calls for a comprehensive review of online business hour restrictions to better reflect current realities and urges institutional improvements that consider consumer convenience and fairness within the distribution industry.
The KCCI also recommended improving the double regulation on cinema advertising. Currently, advertisements shown in cinemas must undergo prior rating review by the Korea Media Rating Board, whereas the same advertisements aired on TV or in subways are subject only to voluntary review. This results in an imbalance, as only cinema advertisements are subject to stricter standards. Furthermore, even minor changes to already approved advertisements, such as subtitles or length, require a new review each time, placing an excessive burden on businesses. The film industry has therefore requested the abolition of the prior rating review for cinema advertisements and a transition to a voluntary review system to enhance autonomy and creativity in the advertising market and revitalize the shrinking cinema advertising sector.
The KCCI also pointed out that, despite the widespread use of mobile notifications for credit card statements, phone bills, and various utility bills in the carbon-neutral era, notices for shareholder meetings are still sent by paper mail. This is because, under current commercial law, written (postal) notification is the default, and electronic notification is only allowed with shareholder consent.
As a result, listed companies in Korea send approximately 100 million sheets of paper annually for shareholder meeting documents, with the cost exceeding 12 billion won per year. Currently, without individual shareholder consent, companies cannot record contact information such as email addresses or mobile phone numbers in the shareholder register, and it is practically difficult to obtain consent for electronic notifications from each shareholder. Therefore, companies have requested the establishment of a legal basis to allow email addresses or mobile phone numbers to be recorded in the shareholder register, making electronic notification the default and expanding shareholders' options for receiving notifications.
The proposal also included the opinion of distribution companies requesting improvements to the price labeling system for quasi-drugs and cosmetics. Under the current system, only retail sellers are allowed to display prices on products, so manufacturers or importers cannot indicate prices directly. This regulation was introduced in the 1990s to prevent excessive discount marketing, but it is now considered ineffective, as consumers can easily compare prices using smartphones and other means. On the contrary, attaching individual price stickers to every product incurs annual labor costs of tens of billions of won, which may lead to higher product prices. The KCCI has therefore proposed that, for quasi-drugs and cosmetics supplied exclusively to certain distributors, manufacturers and importers should also be allowed to display prices on products.
Lee Jongmyung, Head of the Industrial Innovation Division at the KCCI, emphasized, "Eliminating inconveniences that people experience in their daily lives is the starting point for rationalizing regulations," and added, "It is important to swiftly revise regulations that may seem small or trivial but have a significant impact on consumer trust and market efficiency."
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