FTC chief vows e-commerce steps

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FTC chief vows e-commerce steps

Noh Dae-lae, chairman of the Fair Trade Commission (FTC), said the government watchdog is set to toughen sanctions and step up monitoring of e-commerce companies at a ceremony yesterday marking Consumer Rights Day at COEX, Samseong-dong.

Consumer Rights Day was designated on Dec. 3, 1979, when the Consumer Protection Act was passed.

Noh said consumer policies should conform to changes in the new digital economy.

“While deceptive luring of customers is often a problem for offline businesses, at online markets problems of consumers indulging in self-deception based on biased information also occurs,” said Noh.

“There is a limit to regulating unfair business practices online with regulatory guidelines and notices for offline businesses. The FTC will strengthen monitoring of consumer fraud online and provide consumer information on products of high demand in the new age of the digital economy.”

Although the Internet shopping market has grown rapidly to more than 32 trillion won ($30.1 billion) last year, online companies’ misconduct also grew to several million won in sanctions and fines.

At the ceremony attended by 400 officials from the Korea Consumer Agency, consumer groups, local governments and businesses, the chairman also asked for organic cooperation among related entities such as consumer organizations, academia and the government.

“The FTC will spare no expense in maximizing the smooth cooperation between consumer organizations and related entities through support,” said Noh.

At the ceremony, 98 government awards were given out.

“There also have been positive changes in businesses, which voluntarily improved product quality and cut prices as consumers made reasonable purchases based on objective price and quality comparison information,” said Noh.

Noh listed achievements such as a jeans manufacturer with carcinogens detected in its products apologizing to consumers and giving refunds and exchanges, as well as companies that supplied black boxes for vehicles that did not last long announcing plans to repair their products at no charge to customers.

Meanwhile, the FTC chairman also said in an interview with the JoongAng Ilbo on Nov. 28 that he would toughen sanctions by imposing fines for unfair trade practices involving e-commerce, considering that there are many small and individual businesses in the online market.

About the leniency and consent decree proposed by the nation’s top Internet portal companies - Naver and Daum - that would allow them to avoid paying fines of tens of billions of won in potential penalties for unfair business practices, Noh said the decree serves as the middle ground between the Korea Fair Trade Mediation Agency and the FTC. He said it aims to secure the speedy recovery of market order.

The leniency and consent decree includes autonomous restitution, remedies and corrective measures proposed by the accused business operators.

The decree is often used in the United States and Europe because it brings substantial damage relief through voluntary corrective measures and doesn’t undermine the competitiveness of businesses.

“Although it is difficult to draw a clear line on which is applicable for the leniency and consent decree, its application will be limited to new technologies based on the Internet. Nevertheless, when there is an obvious violation of law, companies will be excluded from the decree,” said Noh.

BY KIM JUNG-YOON, KIM DONG-HO [kjy@joongang.co.kr]
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