The KFTC Updates Its Unfair Trade Practices Guidelines

September 1, 2015

The Korea Fair Trade Commission (KFTC) has recently revised its unfair trade practices guidelines (UFP Guidelines) to protect consumers with regards to e-Commerce transactions.  The UFP Guidelines took effect as of August 20, 2015 and cover several new types of e-Commerce transactions.  The UPF Guidelines include recommended practices in the field of (i) social commerce transactions and (ii) price comparison websites.  The revisions are quite detailed in nature and cover such areas as follows:

1. Social commerce sites- the UFP Guidelines regarding social commerce websites have been revised to include the requirement that the product or service advertised on the website must clearly describe the previous price it was traded at. The UFP Guidelines also provides that the site operators shall have the service providers not to discriminate between ordinary customers and the users of coupons.

2. Price comparison websites- the UFP Guidelines have been revised to cover  price comparison websites.  The UFP Guidelines provides that in case of price comparison sites, prices must be compared under the same conditions using the same criteria. The site must compare prices that include option items prices, delivery and installation costs.

The UPF Guidelines also includes examples of violations especially with regards to cancellation policies. The UFP Guidelines prohibits e-commerce companies from requesting unreasonable return costs (except for delivery cost) in case of cancellation of the order.  The UPF Guidelines cover these areas in detail and such terms and conditions of sale are subject to KFTC scrutiny.  It is recommended therefore that foreign companies seek advice of Korean counsel prior to selling online to Korean consumers.

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