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[Bills in focus] Billing chargeback prevention, data center disaster response

By Korea Herald

Published : July 24, 2023 - 15:22

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Proposed bill: Partial Amendment to the Act on the Promotion of Mutually Beneficial Cooperation Between Large Enterprises and Small and Medium Enterprises

Proposed by Rep. Lee Dong-ju (Democratic Party of Korea)

● Unfair transaction practices persist among commissioning enterprises, invoking calls to reinforce regulations against commissioning enterprises that engage in unfair transaction practices. This amendment prohibits companies from misusing technical data of the commissioned company before signing an agreement and raises the maximum compensation amount to five times the value of damages. It also raises the penalties imposed on companies who violate regulations but fail to comply with improvement requests or corrective orders to imprisonment with labor for not more than two years or a fine not exceeding 150 million won ($116,370).

Proposed bill: Partial Amendment to the Act on the Consumer Protection in Electronic Commerce

Proposed by Rep. Yoon Doo-hyun (People Power Party)

● As the subscription e-commerce market continues to grow, there have been increasing demands to enhance consumer protection through explicit regulations. In particular, many have found it unfair that consumers who purchase subscription services but fail to use them within the billing cycle must still pay the full subscription fee. Accordingly, this amendment prescribes subscription business owners to suspend subscriptions that have not been used during the subscription period and notify subscribers of the suspension of service. Furthermore, it enables such subscribers to carry over their unused subscriptions to the next billing cycle.

Pending bill: Framework Act on Service Industry Development

Proposed by Rep. Choo Kyung-ho (People Power Party)

● Despite the importance of the service industry in sustainable economic growth, Korea’s service industry is currently behind other major developed countries in competitiveness and productivity. This bill aims to provide institutional support for the service industry. It formulates a master plan for promoting and developing the service industry, introduces programs to facilitate research and development within the service sector, fosters specialized research and education institutions, establishes a dedicated public-private committee to deliberate on policies related to the service industry, and systematically supports competitive service companies.

Promulgated bill: Framework Act on Broadcasting Communications Development

Competent Authority: Ministry of Science and ICT

● The recent fire incident at the Pangyo Data Center has underscored the importance of establishing a disaster management system for data center operators and major online service providers. The damage caused to the public was extensive due to the prolonged recovery and restoration of disrupted services. This bill includes data center operators and major online service providers to the scope of subjects under the government’s master plan for major broadcasting communication entities, which implements a disaster prevention, training and recovery system to enable expeditious response to disasters and service disturbances. It also revises the plan to incorporate physical and technical measures, such as server distribution and multiplexing, to minimize damages by service disturbances.

Administrative announcement: Partial Amendment to the Enforcement Rules of the Special Act on Private Rental Housing

Competent Authority: Ministry of Land, Infrastructure and Transport

● Rental business operators often neglect their duty to purchase security deposit refund guarantees, leaving lessees vulnerable to housing scams. This amendment aims to protect lessees and create a safer housing market by strengthening the requirement for registered rental business operators to purchase security deposit refund guarantees. It allows lessees to terminate a lease contract and claim compensation for the resulting damages if the rental business operator fails to fulfill its obligation of purchasing a security deposit refund guarantee.

The Korea Herald republishes a weekly legislative report by local law firm DR & AJU LLC to provide the latest information on bills approved, proposed, pending and set to be promulgated. -- Ed.

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For any queries about the bills, contact cr@draju.com.