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South Korea to Tighten Rules on E-commerce Platforms to Protect Small Businesses
Source: Wikipedia

South Korea to Tighten Rules on E-commerce Platforms to Protect Small Businesses

Philip Lee profile image
by Philip Lee

Sejong, South Korea—The Fair Trade Commission (FTC) announced plans to amend the Act on Fair Transactions in Large Retail Business to enhance protection for small businesses in online marketplaces. 

The move comes after recent non-payment incidents involving major e-commerce platforms Tmon and Wemakeprice.

The total delayed payments by TMON and WeMakePrice to their vendors have reached KRW 818.8 billion ($600 million) as of October 2024

Key points of the proposed amendment:

  • Scope: Applies to online intermediary platforms with annual brokerage revenue of KRW 10 billion ($7.3 million) or transaction volume of KRW 100 billion ($73 million).
  • Payment deadlines: Platforms must settle payments within 20 days of purchase confirmation, down from the current industry average of 19 days.
  • Funds protection: Platforms must secure 50% of sales proceeds through separate bank accounts or payment guarantee insurance.
  • Implementation: One-year grace period after promulgation, with gradual tightening of rules over two years.

The FTC aims to prevent future non-payment incidents and improve fairness in online transactions. 

The amendment introduces standardized contracts and dispute-resolution mechanisms between platforms and vendors.

FTC Chairman Han Ki-jeong stated,

"This amendment will enhance transaction stability and reliability for numerous small business vendors while strengthening fairness in the online intermediary market."

The commission will work closely with the National Assembly to expedite the legislative process.

Philip Lee profile image
by Philip Lee

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