The Korea Fair Trade Commission (KFTC) has forced Netflix to fix its unfair contract clauses for the first time worldwide. A total of six clauses have been revised and those will become effective on Jan. 20.
According to one of the six previous clauses, a change in membership or fees can occur at any time and every such change becomes effective at the next payment starting from a notification of the change. The provision has been revised so that every such change is subject to a customer’s prior consent and the membership can be canceled when he or she does not agree to the change.
In addition, Netflix now must be responsible for customers’ losses attributable to its intention or mistake and responsible for their unusual losses if those are intentional or serious. Previously, Netflix members had no rights at all with regard to special, indirect and secondary compensation claims against Netflix.
When it comes to the provision allowing a contract transfer at any time, an additional clause will become effective so that such transfers can occur in accordance with legal procedures and the membership can be terminated at any time in the case of disagreement.
In the meantime, the KFTC is currently looking into the OTT service market as a whole. It organized a monitoring team in November last year in order to prevent global platform companies such as Google from monopolizing the market. At the same time, the KFTC is going easier on South Korean OTT platforms. For example, it conditionally approved business combination between terrestrial broadcasting companies’ POOQ and SK Telecom’s Oksusu in August last year. At that time, the outcome of the combination was regarded as a new OTT service to compete with Netflix.