E-Commerce Act

The E-Commerce Act imposes on businesses a duty to clearly and accurately provide the core information that consumers need in order to select goods or services.

Accordingly, the product name, price, quality, main specifications, shipping costs, withdrawal-of-subscription conditions, seller contact information, and the like must be included as mandatory items.

In practice, however, the following problems frequently occur.

▶Displaying a price as if it were discounted in an exaggerated manner, or failing to clearly disclose that additional costs are added to the actual payment amount

▶Expressing free-shipping conditions ambiguously, or having the consumer learn of an additional shipping cost only later

▶Cases of exaggerated advertising of the quality or function of a product that differs from reality

▶Providing the seller's contact information or business information incompletely, making it difficult for the consumer to make contact when a problem arises

Such failure to provide information or false description can distort consumers' purchasing decisions and cause harm, and is therefore strictly prohibited by law.

In the event of a violation, administrative dispositions such as the imposition of administrative fines, corrective orders, and in serious cases business suspension may be issued by the Fair Trade Commission or local governments.

When preparing product pages and advertising materials, companies must carefully review the provision of information in accordance with legal standards, and marketing copy must also be based on facts.

The E-Commerce Act guarantees the consumer's right of withdrawal of subscription (the right to cancel a contract within a certain period after purchase).

A consumer may generally withdraw a subscription within 7 days after receiving the goods, and the business must make a refund without delay in response.

However, the following violations occur frequently.

▶Cases in which, even though a consumer has applied for withdrawal of subscription, the business delays or refuses it

▶Cases of failing to clearly disclose the grounds on which withdrawal of subscription is restricted (for example, custom-made products, products that cannot be resold once opened, and the like) or restricting it arbitrarily

▶Cases of operating the refund procedure, period, and method in a way that is complex and difficult for consumers to understand, or imposing unreasonable conditions

▶An increase in consumer complaints and disputes due to refund delays

Such problems can lead not only to a decline in consumer trust but also to legal disputes, and are subject to corrective orders and administrative fines from the Fair Trade Commission.

Companies should clearly establish and disclose their withdrawal-of-subscription policy, post it on their website so that consumers can easily learn of it, and have internal processes in place to handle applications promptly.

In e-commerce, businesses collect, use, and store consumers' personal information, and the Personal Information Protection Act and the Electronic Commerce Act impose strict regulations on these activities.

The main types of violations are as follows.

▶Obtaining consent without clearly disclosing the purpose, items, and retention period when collecting personal information

▶Using personal information beyond its intended purpose, such as for marketing or provision to third parties, without the consumer's consent

▶Inadequate technical and managerial protective measures against personal information leaks

▶Failing to provide a procedure for withdrawing consent, or making it complicated so that consumers find it difficult to exercise their rights

Such conduct not only seriously undermines a business's credibility but can also lead to large-scale harm in the event of a personal information leak, and it may be subject to penalty surcharges and criminal punishment.

Companies should clearly establish and disclose a personal information processing policy, design consent forms and procedures to comply with the law, and conduct periodic internal reviews and employee training.

The Electronic Commerce Act requires that, once a transaction is concluded, an electronic document containing the contract terms be provided to the consumer immediately.

This includes the transaction details, the content of the offer, the payment terms, and the method for exercising the right to withdraw the offer.

However, companies often encounter the following problems.

▶The electronic document is sent late, so the consumer cannot review the transaction details in time

▶Supporting documents related to the contract are omitted or only partially provided

▶The obligation to retain electronic documents is neglected, making it difficult to submit supporting evidence in the event of a dispute

This undermines the protection of consumers' rights, and it puts the company at a legal disadvantage if a dispute arises.

Companies need to adopt an electronic contract system and an automated electronic document delivery solution so that contract terms are delivered to consumers quickly and accurately, and establish a system to store them securely.

The Electronic Commerce Act prohibits unfair clauses in terms and conditions in order to protect consumers' rights and interests.

The types of unfair terms and conditions frequently found are as follows.

▶Clauses that restrict contract cancellation in a manner excessively disadvantageous to the consumer

▶Granting the business the authority to change the contract unilaterally

▶Content that imposes an excessive burden of liability for damages on the consumer

▶Clauses that impose unreasonable conditions on the exercise of the right to withdraw an offer

If a company uses such terms and conditions, they are treated as void, and the company becomes subject to corrective recommendations and administrative sanctions from the Fair Trade Commission.

When drafting terms and conditions, companies should thoroughly comply with the Fair Trade Commission's guidelines and have them reviewed by a legal professional so that they do not infringe consumers' rights.