YouTube lied about rates, withheld refunds: Regulators

YouTube faces 867 million won ($743,000) in fines after a Korean regulator found that its subscription service failed to refund money to users and falsely advertised its monthly rates.

The Korea Communications Commission (KCC) announced the findings Wednesday afternoon, following a two-year investigation of YouTube Premium, a subscription service that eliminates advertisements before and after videos on the platform. YouTube’s parent company, Google, did not immediately indicate whether it intends to appeal the ruling.

Google attorneys argued that the company’s actions are established practices among subscription service providers and therefore cannot be seen as violating the law.

The commission found that YouTube stopped users’ subscription services the next payment date following their cancelation request, instead of doing so immediately. It proposed a 435 million won fine for this practice, saying it was against conventional understanding that “a user that disconnected the service a day before the payment date and 29 days before should be treated the same.”

An additional 432 billion won fine was levied on YouTube for failing to include the cost of a surtax in the advertised subscription price.

It also claimed that YouTube did not allow users to cancel subscriptions that were automatically paid for after the free trial period, contrary to conventional practice among local service providers that allow refunds within seven days.

“E-commerce transactions are not conducted face-to-face - this can create issues like the consumer impulsively making purchase decisions without properly understanding the product,” said commissioner Heo Wuk.

In a meeting Wednesday with KCC commissioners, Google’s attorney Yang Dae-kwon of Kim & Chang called the fines excessive, arguing that the practices do not truly damage user benefits and that they’re widespread industry practices.

“Our stance is that users are aware that after the free trial period, the service will be automatically changed to monthly subscriptions,” Yang said.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]