FTC identifies, prohibits, streaming-service 'dark patterns'

A passerby walks past a Netflix logo set up at Coex in Samseong-dong, southern Seoul, last December to promote the release of "Hellbound" (2021). [YONHAP]

Netflix and four other streaming service providers were fined a combined 19.5 million won ($16,280) by the Fair Trade Commission (FTC).

Netflix Korea's Netflix, Google's YouTube, KT's Olleh TV Mobile, LG U+'s U+ Mobile TV and Content Wavve's Wavve were found to have made it difficult for subscribers to cancel their membership and receive refunds.

The FTC announced Feb. 13 that it fined Google 7 million won and Netflix 3.5 million won. KT, LG U+ and Content Wavve were each fined 3 million won.

According the user agreements, Netflix and YouTube Premium subscription fees are nonrefundable.

The Act on the Consumer Protection in Electronic Commerce requires companies to offer a full refund within seven days of purchase if they haven't watched videos offered by the services.

KT's service is also not refundable unless the user encounters a "problem" — which isn't specifically defined in its terms and conditions — within six days of payment.

LG U+ states that users can't cancel subscriptions during the first month. Refunds are prohibited if people used LG U+ membership loyalty points to pay for part of the subscription. Content Wavve also states membership fees can't be refunded.

Canceling subscriptions, which under the electronic commerce act must be easy, was made difficult by three companies.

Users had to contact Content Wavve and KT's customer service center either via phone or online chat to cancel their subscription. For LG U+, cancellations were only allowed after calling the company's service center.

Despite the difficult cancellation process, users were able to conveniently sign up for all three streaming services on apps or online.

Along with the fines, all five companies must end the practices.

The FTC has been carefully monitoring so-called dark patterns, widespread tricks adopted by companies to deceive consumers. In January, it set up a task force that specifically monitors such deceptive business practices.

"We are closely looking into various dark patterns, considering the big platforms can inflict huge damages on consumers," said Jeon Young-jae, head of the FTC's E-commerce Division. "If we find any illegal practices, we will impose strict restrictions."

BY JEONG JIN-HO, LEE TAE-HEE [lee.taehee2@joongang.co.kr]