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FTC fines 7 platforms for unfair online practices

Feb 25,2019
The Fair Trade Commission (FTC) on Sunday fined seven media platforms for unfair business practices.

It has specifically been targeting so-called one-person media companies that provide content services for independent video content producers. Some of the country’s largest media operators, such as mainboard-listed Kakao and Kosdaq-listed AfreecaTV, were on the list.

The other companies fined were Global Monster, MarketingIs, Winenterpise, cen Cloud and The E&M.

In the Sunday announcement, the FTC said it issued a total of 20.5 million won ($18,250) in fines for violations of the Act on the Consumer Protection in Electronic Commerce, the country’s online transaction law. Specific offenses included misleading pricing and unfair service agreements.

The FTC said AfreecaTV misled users with low product prices by excluding the value-added tax. According to mobile app tracker WiseApp, AfreecaTV has 2.15 million Android users.

Four other companies advertised their products as non-refundable, preventing users from making returns and receiving refunds. Under the online transaction law, consumers must be permitted to withdraw from an agreement to buy within a week of the purchase.

The law prohibits actions that prevent service agreement withdrawals.

AfreecaTV and Kakao did not include a mandatory clause in their payment-service agreement for underage users that would allow legal representatives, such as parents, to make cancellations.

A report by the Korea Consumer Agency in 2017 found that 62.5 percent of consumer complaints against one-person media platforms from 2014 to 2017 were related to refunds for paid services.

All seven companies failed to fully disclose company information on their websites, or link to the FTC’s website.

AfreecaTV was the biggest offender; it was fined for a total of four violations and has to pay 4 million won, the most of the seven.

The latest announcement by the FTC comes as online video media platforms have become a sizeable force in the local content market.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]


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