Targets Naver, Kakao, Coupang and Baemin
The Korea Fair Trade Commission (KFTC) has announced the enactment of a new law for fair intermediate transaction on online platforms.
The bill will be applied to every business acting as a product or service transaction intermediary between a consumer and an online platform user. The examples include open markets, delivery apps, app markets, accommodation apps, price comparison services, real estate and used car information services and search ad services.
In addition, application standards are likely to be fixed within 10 billion won in sales and 100 billion won in intermediate transaction values. Naver, Kakao, Coupang and Baemin are likely to be regulated as a result. The bill is applicable to foreign and overseas online platforms, too.
“Of major businesses, at least eight open markets, two accommodation apps and four delivery apps will be covered by the law,” the KFTC explained, adding, “Their intermediate transaction values add up to 90 trillion won and the number of businesses using the online platforms is estimated at 1.4 million.”
The law is not applied to product and service transactions in which an online platform itself is a transacting party. In addition, search engines for consumer intermediation without a contract with an online platform are not covered by the law, either. In other words, Google can be covered by the law unlike Netflix.
According to the law, an online platform business must draw up and deliver a written contract for a business using the platform and give a prior notice to it. In addition, an online platform business abusing its power in relation to a business using the platform is subject to a penalty equivalent to up to twice the value pertaining to the violation. Punitive measures, however, are applied to a retaliatory measure and non-compliance with a corrective order without being applied to abuse of business position.