This presentation by the Korean Fair Trade Commission was made during a workshop on “Regulation and competition in light of digitalisation” held by the OECD in Paris on 31 January 2018. More papers and presentations on the topic can be found out at oe.cd/wrcd.

3. 


5. Distinct User Groups
Indirect network effects
Internalization of
network effects
01
02
03
Two or more distinct user groups exist,
which require interconnectivity
A change in the number of users on one side
of the platform changes the value of a product
or service to a group of users on other side of
the platform
It is difficult for different consumer groups to
internalize the externality of cross network with
self-made efforts (direct transaction)
- KFTC Decision(Resolution 2008-251, 2009-146) and other cases

7. 


8. Regulations on Online Platforms

10. ① Popular: Frequently searched by users, which were led to be put on the upper side (43.4%)
② Certified: Certified for its excellency by Naver (17.8%)
③ Excellent: Products or service sold on the sites are excellent in quality (7.2%)


12. Related Acts / Scope of Application
> Businesses related with transactions in a ‘non-face-to-face’ manner
> Businesses labeling and advertising for products or services
Act on the consumer protection in electronic commerce, etc.
> Businesses using terms and conditions in business transactions
Act on fair labeling and advertising
Act on the regulation of terms and conditions

13. Established the Act to prevent consumer damage incurred from non-face-to-
face transactions as online shopping skyrocketed in the 1990s.
Act on the consumer protection in electronic commerce, etc.
Obligation to report: To operate an online shopping mall, need to report to the relevant
institute (KFTC or local government) before starting the business
Obligation to provide information: Need to provide information on identity and
transaction terms of online shopping mall businesses (detailed information on the
products, damage compensation criteria, etc.)
Prohibition of interfering with withdrawal of contract: Consumers are allowed to
withdraw from contract within seven days after the purchase (Note, however,
products with defects, within three months)
①
②
③
Examples of online shopping mall operators’ duties & prohibitions under the Act

14. Clearly stipulate the regulations on online market place operators like G-market to prevent
them from evading responsibilities of consumer damage just because they are agents.
Act on the consumer protection in electronic commerce, etc.
Need to notify the consumers that they are not the parties to the transaction (otherwise, the
operator is liable for property damage incurred to consumers along with the suppliers)
Need to provide the seller’s identity information such as name and address of the
suppliers
Need to promptly take necessary measures such as identifying the causes and
damages to resolve complaints or dispute that occur within their own platforms.
①
②
③
Examples of open market operators’ duties & prohibitions under the Act

15. When referencing to the principles and guidance of OECD Competition Assessment Toolkit,
the regulations against platform businesses under the Act can be evaluated as followings.
Act on the consumer protection in electronic commerce, etc.

If imposing the same responsibilities on online market place operators as general online
shopping mall operators, it can cause the contraction of online market place (agent
model), and diminish consumer benefits

Having online marketplace operators provide necessary information to consumers, and
demanding least dispute settlement capabilities is evaluated as an appropriate measures
to prevent consumer damage in the relevant sector and maintain free competition