Coupang, Wave, NHN Bugs, Spotify penalized 10.5M won for violating Electronic Commerce Act

The Korea Fair Trade Commission (KFTC) announced on the 15th that it had imposed a total fine of 10.5 million Korean won on four online shopping mall, OTT, and music streaming service operators -- Coupang, Contents Wave (Wave), NHN Bugs (Bugs), and Spotify -- for violating the Electronic Commerce Act.

According to the KFTC, these businesses violated the "Act on Consumer Protection in Electronic Commerce, etc." by deceiving consumers or failing to properly disclose transaction terms. The fines per business are ▲Coupang, 2.5 million Korean won ▲Contents Wave, 4 million Korean won ▲NHN Bugs, 3 million Korean won ▲Spotify, 1 million Korean won.

First, Coupang was found to have induced consumer consent in a deceptive manner when it raised the monthly fee for its paid membership "Wow Membership" from 4,990 Korean won to 7,890 Korean won in April of last year.

Coupang prominently placed a large blue "Agree and Continue Receiving Benefits" button in the center-bottom of the app's initial pop-up screen, while the "Do This Later" button was displayed small and faintly in white at the top-right of the screen. Existing members had to click one of the two buttons to search for products or make payments, and if they selected "Do This Later," the pop-up reappeared every five days.

Additionally, during the product payment step, the existing "Pay" button was changed to "Agree and Purchase," confusing consumers about agreeing to the price increase and making payments. In contrast, the "Decide Later and Purchase" button was displayed in a hard-to-recognize white color, making it difficult for consumers to select.

The OTT platform Wave (Contents Wave) and the music platform NHN Bugs were criticized for unnecessarily complicating the subscription cancellation process, thereby obstructing contract termination.

Additionally, NHN Bugs and Spotify failed to properly provide product and transaction terms information, and Spotify was found to have neglected its obligation to display cyber mall operator information.

"A source from the KFTC" stated, "Businesses engaged in deceptive practices to attract or transact with consumers while operating communication sales businesses, and failed to properly disclose important information affecting consumers' purchasing choices and contract cancellations. Such actions hinder consumers' rational purchasing decisions and may obstruct the exercise of contract cancellation and withdrawal rights. We will strengthen monitoring of these practices."