Retailers fined for false pricing on mobiles

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Retailers fined for false pricing on mobiles

Six large retailers have been fined by the Fair Trade Commission for falsely making it appear their mobile shops offered lower prices than on their Websites to boost mobile sales, even though the prices on both platforms were really the same.

The nation’s antitrust agency said yesterday that, SK Planet (which operates the popular online shopping site 11st), eBay Korea, Hyundai Hmall, Auction, AK Mall and GS Shop were given fines worth 37 million won ($34,500) for deceiving consumers.

Each was fined between 5 million won to 9 million won.

Hyundai Hmall received the largest fine, 9 million won, because it both cheated consumers and did not follow the authority’s guidelines for reporting and making public information about mobile shop operators.

The agency found the retail companies advertised existing products on their Websites as cheaper on the versions of their stores accessed on smartphones with the intention of ramping up sales via the new channels.

Those companies intentionally created special offers on their smartphone applications, according to the agency.

Another 17 online retailers that operate mobiles shops, including Groupon, Interpark, Coupang, Timon and KakaoTalk, were warned by the FTC about violating the authority’s guidelines.

Given that the mobile shopping market is rapidly growing, the FTC judged that consumers were hurt by the retailers’ tricky offers.

“By June, the FTC will come up with detailed guidelines on the mobile commerce market to protect consumers with clear product information and ensuring rights on ordering and reservation cancellations,” said Shim Joo-eun, an official at the government agency.

According to a report by market researcher DMC Media, about 67 percent of Korea’s 36 million smartphone users have shopped using mobile platforms as of last year.

The market is expected to grow to 7.6 trillion won this year, according to data compiled by the Korea Online Shopping Association.

By Song Su-hyun []
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