Online shopping mall
Online shopping mall – general meaning
- "Online shopping mall" (aka cyber-mall) refers to virtual business premises through which goods may be sold online.
Mail order brokerage
- “Mail order brokerage” refers to the act of mediating between the parties to a transaction by allowing them to use one’s cyber-mall (virtual business premises through which transactions of goods are carried out using information/communications devices and facilities such as computers) or by providing ads for mail orders in one’s name, marking one’s name on ads to provide information on mail orders, or receiving orders to carry out parts of mail orders (Article 2-4 of the 「Act on the Consumer Protection in Electronic Commerce, etc.」).
· When a business operates a site by simply displaying a banner on a portal site so that customers who click on the banner may move to another site to conduct a transaction, the business is not regarded as a mail order broker as it does not carry out an important part of the mail order procedure (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 (FTC Public Notice No. 2015-7 dated August 20, 2015) Ⅱ, 2, Sa).
· However, if the business fails to ensure that consumers can clearly see that the site they have moved to via the banner on its portal site is quite different to the portal site itself, and thus believe that the site they have moved to is one operated by the portal site, the business operating the portal site shall assume responsibility as the pertinent mail order broker or mail order business (「Guidelines on the Consumer Protection in the Electronic Commerce Transactions, etc.」Ⅱ, 2, Sa).
- Where a mail order distributor fails to perform his/her duties pertaining to the following, a mail order brokerage business operator who performs the following affairs in processing transactions related to the mail order, shall perform the relevant duties on his/her behalf (Article 20-3 of the Act on the Consumer Protection in Electronic Commerce, Etc.).
· Where the mail order brokerage business operator receives an order.
√ Provision of information referred to in Article 13(2)5 of the Act on the Consumer Protection in Electronic Commerce, Etc.
√ Confirmation of the order pursuant to Article 14(1) of the Act on the Consumer Protection in Electronic Commerce, Etc.
√ Other matters prescribed by the Enforcement Decree of the Act on the Consumer Protection in Electronic Commerce, Etc., as necessary to prevent consumer damage.
· Where the mail order brokerage business operator receives payment of the price of goods, etc.
√ Prevention of input error, etc. pursuant to Article 7 of the Act on the Consumer Protection in Electronic Commerce, Etc.
√ Securement of confidence in electronic payment pursuant to Article 8 of the Act on the Consumer Protection in Electronic Commerce, Etc.
√ Other matters prescribed by the Enforcement Decree of the Act on the Consumer Protection in Electronic Commerce, Etc., as necessary to prevent consumer damage.
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Responsibility of mail order brokerage business
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Q. A customer bought an MP3 player from a business in J Market, which is a mail order brokerage site. The MP3 player delivered to him was of poor quality. He tried to get in touch with the seller to request an exchange or refund, but to no avail. In this case, is J Market responsible for the poor quality of the MP3 player? A. Under Article 20 of the 「Act on the Consumer Protection in Electronic Commerce, etc.」, mail order brokerage businesses such as J Market and the seller shall be jointly and severally responsible for making up for losses and damages incurred by consumers, unless J Market has put up a public notice to the effect that it cannot be liable for the sale of goods in advance (Article 20 (1) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」). A mail order broker such as J Market should provide consumers with a way of gaining access to information on the party that has entrusted mail order to it, such as its address and phone number (Article 20(4) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」). <Korea Consumer Agency>
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Social commerce
Social commerce – general meaning
- "Social Commerce" refers to a business that provides information on the customer's right to be supplied with goods, and sells them based on orders received through its cyber-mall.
· A business that sells vouchers (“the right to use”) at its cyber-mall for meals offered at good prices at a restaurant run by another person is an example of social commerce (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 Ⅱ, 2, Ga, (2)).
· Social commerce falls under the category of mail order, as a business engaging in it provides information on the right to use and sells the right to use based on orders received on a non-face-to-face basis (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 Ⅱ, 2, Ga, (2)).
Recommendation for businesses engaging in social commerce
- A social commerce business selling goods or such like at discounted prices should indicate the following information on the cyber-mall screen: prices that give an accurate idea about the discount (e.g. previous/current prices); the timing of offering of the discount, characteristics of goods or the like that have an impact on the referenced price (e.g. all day, daytime, nighttime, and weekday/weekend, etc.), additional expenses to be paid, etc. (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 III, 5, Ga).
- A social commerce business that sells the right to use goods or the like within a given period of validity should remind consumers of the need to use the right to use within the given period of validity by informing them of the name of the coupon via e-mail or a cellphone text message at least once before the expiration of the period of validity, provided that it has their contact number or e-mail address. (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 Ⅲ, 5, Na))
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Validity of social commerce coupons
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Q. Can I use a coupon I bought from a social commerce whose period of validity has expired? A. Needless to say, it would be too much to say that consumers gain nothing from a thing for which they have paid a considerable price, just because the validity set by the business concerned has expired. Let us say rather that the failure to use a coupon within the given period of validity is a type of breach of promise and that social commerce transactions should entail a heavier penalty than other types of transactions for a breach of promise due to the specificity of their business models, higher promotional expenses, and pre-notice of their refund policy. Compared with other types of transactions, refusal of refund or imposition of a penalty equal to 100% of the price of the coupon is thought to be unfair. <Korea Fair Trade Commission>
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- Businesses shall ensure that the providers of goods or the like do not discriminate against consumers who have purchased the right to use from other ordinary consumers (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 Ⅲ, 5, Da).
※ The foregoing recommendation is intended to encourage businesses’ voluntary compliance to ensure the establishment of sound transaction practices and effective consumer protection. Where businesses’ terms and conditions are more disadvantageous to consumers than the foregoing recommendation, the businesses shall explain the content of the terms and conditions in plain words and put them up on public notice. Failure to do what is stated in the foregoing shall be subject to the imposition of remedial sanctions under the 「Act on the Consumer Protection in Electronic Commerce, etc.」, Article 32 (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 2).
Purchasing agent service provided by a party in a foreign country
Purchasing agent service – general meaning
- "Purchasing agent service" refers to a transaction in which a business provides information on goods or the like sold at a cyber-mall in a foreign country through its own cyber-mall, and purchases the goods or the like ordered by consumers and delivers them to the consumers.
· Purchasing agent services fall under the category of mail order, as they provide information on goods or the like sold at a cyber-mall in a foreign country through its own cyber-mall, and purchases the goods or the like ordered by consumers in a non-face-to-face way (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 Ⅱ, 2, Ga, (3)).
Overseas delivery service
Overseas delivery service – general meaning
- "Overseas delivery service" refers to a transaction in which a business provides information on the goods delivery service provided at a cyber-mall in a foreign country through its own cyber-mall and provides the service for consumers based on their orders.
· Overseas delivery services fall under the category of mail order, as they provide information on the goods delivery service provided in a foreign country and provide the service for consumers based on their orders in a non-face-to-face way (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 Ⅱ, 2, Ga, (4)).
Price comparison search sites
Price comparison search sites – general meaning
- "Price comparison search sites" refers to websites that offer information on goods, and particularly their prices, offered at shopping/auction sites.
Recommendation to price comparison search site businesses
- Businesses shall engage in the following in order to provide consumers with accurate information for the purpose of price comparison (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 Ⅲ, 6 Ga).
· They shall provide information on price comparison based on prices equally to all consumers without separate conditions (e.g. holding specific credit cards).
· They shall provide such information, including prices with amounts added due to options, if applicable.
· They shall provide such information, including easy-to-understand explanations of delivery and installation expenses added in the event of specific regions or items, if applicable.
- Businesses shall engage in the following to prevent losses and damages incurred by consumers by the provision of information for the purpose of price comparison to consumers (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 Ⅲ, 6 Na).
· They shall provide easy-to-understand explanations to consumers concerning the criteria for the exposure of goods or the like, including prices, amount of sales, and date of introduction to market, etc.
· They shall take measures to prevent deceptive transactions where consumers are misdirected to information which differs from what they really want in terms of prices, sizes, and quantities, etc.
※ The foregoing recommendation is intended to encourage businesses’ voluntary compliance to ensure the establishment of sound transaction practices and effective consumer protection. Where businesses’ terms and conditions are more disadvantageous to consumers than the foregoing recommendation, the businesses shall explain the content of their terms and conditions in plain words and post the relevant public notice. Failure to do what is stated in the foregoing shall be subject to the imposition of remedial sanctions under the 「Act on the Consumer Protection in Electronic Commerce, etc.」, Article 32. (「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 2)