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FTC to keep eyes on unfair practices in e-commerce sector

Joh Sung-wook, chairperson of the Fair Trade Commission (Yonhap)
Joh Sung-wook, chairperson of the Fair Trade Commission (Yonhap)

Amid growing scrutiny of online giants Naver and Kakao, South Korea’s antitrust watchdog chief on Friday spoke of the need to regulate massive online platforms in order to better protect small vendors and consumers.

“E-commerce platforms have brought new benefits and convenience, but concerns over side effects have newly arisen,” Joh Sung-wook, chairperson of the Fair Trade Commission, said during a breakfast meeting organized by the European Chamber of Commerce in Korea.

“Online platforms provide new opportunities for market access, but concerns about unfair business activity linger. Consumers are given more choices, but damage to them is also on the rise,” she said.

The FTC will focus on introducing legal measures to prevent unfair practices by e-commerce platform operators stemming from their powerful market position in the pandemic-driven contactless trend, the chief said.

Joh also spoke of a new department at the FTC dedicated to monitoring unfair trade practices in the digital advertising sector. The chief said the FTC will counteract unfair business activities of ad platform operators, as well as their possible abuses of market powers and customer data.

The FTC will also expand the workforce focusing on matters related to online app stores and their in-app purchase policies, she said. The watchdog will look into how in-app purchase policies of leading app store operators influence the market and how they affect interests of customers and app developers, she added.

Currently, the FTC’s revisions to the country’s e-commerce law and the law for fair transaction on online platforms are pending at the National Assembly.

The proposed e-commerce law will impose a greater responsibility on e-commerce platform operators to protect rights and interests of customers. The other law proposed for fair transactions on online platforms will allow the government to impose penalties on e-commerce platforms with an upper limit of 1 billion won ($860,000) for unfair business practices.

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