Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
FTC to tighten e-commerce rules after collapse of TMON, WeMakePrice
Fair Trade Commission Chairman Han Ki-jeong speaks during a press conference at a restaurant near the Government Complex Sejong, Wednesday. Yonhap
By Lee Min-hyung
Online retailers will be forced to make timely payment to sellers
The nation's antitrust watchdog is set to toughen rules on e-commerce firms to ensure transparent and fair transactions with their sellers amid lingering fears of possible recurrence of the recent dual collapse of two once-influential online shopping platforms, TMON and WeMakePrice, according to the Fair Trade Commission (FTC), Wednesday.
The move comes as part of a countermeasure to prevent such cases from recurring again. The now-defunct companies failed to make timely payments to their sellers. Customers who purchased goods and travel products on the platforms also fell victim to delayed refunds from them.
"We are going to make it a rule for any such firms to make payment to their sellers within a certain period of time and will review introducing other regulatory frameworks to build a fair transaction ecosystem between sellers and platform operators," FTC Chairman Han Ki-jeong told reporters during a press conference in Sejong.
The FTC will soon submit a proposal for revision to an act on fair transactions in large retail businesses. The authority plans to conduct in-depth negotiations with industry experts and officials before finalizing details on the revision.
"We will come up with details on the revision after thoroughly discussing it with a group of officials from the industry and relevant authorities," he said.
"The FTC plans to submit the revision proposal to the National Assembly sometime by the end of August."
Under the act, big retail players, such as E-Mart, should finish making payments to their product suppliers in less than 60 days after their sales. Online e-commerce players, however, haven't been subject to the same rule.
The ill-fated e-commerce firms caused huge damage to sellers and customers. In the first nine days of August, 9,028 customers applied for dispute settlement mediation with the authority. Their combined damage amounted to around 25.6 billion won ($18.8 million), according to the FTC.
Han also expressed regret, as the authority has failed to preemptively monitor signs of their collapse.
"The FTC feels a strong sense of responsibility for not identifying the market circumstances in advance," Han said. "To prevent the recurrence of such incidents, we will launch a special task force to step up monitoring on potential signs of such risks from market players."
The FTC also pledged to provide unwavering support for customers who plan to file a compensation suit against the e-commerce firms.
He added, "We cannot share details, as the investigation into TMON and WeMakePrice is still underway, but we will fully support any customers seeking compensation from them."