Commission orders IPTV providers to relax billing

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Commission orders IPTV providers to relax billing

The Fair Trade Commission (FTC) on Tuesday ordered internet protocol TV (IPTV) service companies to drop contract language allowing them to charge customers who never used the service and canceled within the first month of their new subscription.

The antitrust agency has requested terms-of-service changes for three IPTV Korean companies - KT, SK Broadband and LG U+.

Under the change, the companies would have to fully refund customers who cancel the video-on-demand service within seven days and never use the service. But when a cancellation request is made after seven days, the company can still charge the users on the first several days leading up to the cancellation date, plus 10 percent for the remaining days.

By allowing the companies to still bill for part of the subscription period, the FTC said it would discourage subscribers from canceling the service after viewing many videos in a short period of time. Demanding a full refund will be unfair to the IPTV service providers, the agency said.

“We expect the clarification of the terms of cancelling and refunding the IPTV additional services will guarantee the customers’ rights and prevent further damages,” said Lee Tae-hwi, head of the FTC’s terms review department.

Earlier this month, the Korean antitrust agency became the first in the world to order the online streaming giant Netflix to change several requirements in its terms of service, including raising the bill without the consent of its customers.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]

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