Gmarket, Auction, 11st, Interpark punished for deceiving consumers

By Nam Hyun-woo

In a captured image of Auction’s mobile website, the highlighted part specified products were displayed by “Auction Ranking,” but did not inform users that advertised products were placed above other ones. / Courtesy of the Fair Trade Commission

Three major online open market operators in Korea were slapped with fines for hiding or downsizing the fact they prioritized advertised products at the top of their mobile websites, the country’s antitrust watchdog said, Wednesday.

The Fair Trade Commission (FTC) said it has imposed a fine of 10 million won to eBay Korea, operator of online retailers Gmarket and Auction, for “deceiving consumers.” SK Planet, operator of 11st, and Interpark were also fined 8 million won for the same reason.

The three companies display advertised products above others on their mobile pages, though they specified that products were displayed by various orderings such as top selling, lowest price and most recent. Also, they gave additional display points to promoted products depending on size of advertising payments, according to the FTC.

Also, some of them did not notify consumers that some product ads are paid for until the FTC launched a probe last year. In other cases, the companies notified customers of advertising promotions by ambiguously adding “promotion activity” or “AD.”

The FTC ordered the companies to correct such illegal practices within 60 days, adding that they should consult with the watchdog on the notification method for promoted products.

This is the third time in three years that eBay Korea has violated the Act on Consumer Protection in Electronic Commerce. SK Planet and Interpark have also violated the act twice during the same period.

“Amid the ever-increasing volume and value of mobile shopping, the fresh punishment has significant meaning to correct open market operators’ illegalities,” the FTC said in a statement.

The volume of mobile shopping stood at some 24.4 trillion won last year, up 64.3 percent from 2014. It accounted for some 45.3 percent of online shopping.

Gmarket has 39 percent of market share, while Auction claims 26 percent. SK Planet’s 11st has 32 percent and Interpark’s share is 3 percent.