Efforts to improve regulations aimed at eradicating the cross-border online counterfeit market have been repeatedly stalled. Although legislation has been pushed to strengthen the responsibility of e-commerce platforms, which have emerged as major channels for counterfeit sales in recent years, core government measures-such as the mandatory designation of domestic agents for overseas online sellers-are facing obstacles due to pressure from the administration of former US President Donald Trump, which prioritized the 'Make America Great Again (MAGA)' policy.

Legislation targeting Chinese e-commerce platforms such as Aliexpress and Temu, which have expanded into the Korean market, and seeking to impose joint liability on intermediary platforms for counterfeit sales, has also been introduced but remains pending in the National Assembly. Industry stakeholders are urging for urgent amendments to the Trademark Act to require e-commerce platforms to swiftly block counterfeit goods distributed on their sites.

US-China Trade Friction 'Watching Closely'
Several Years of Focus on Counterfeit Sales
Strengthening Responsibility of E-commerce Platforms
Multiple Regulatory Improvements Stalled

Targeting Chinese E-commerce Platforms like Aliexpress and Temu
Legislation on Joint Liability for Counterfeit Sales Intermediaries Also Stalled

Need for Legalization of Domestic Agent Designation System
To Protect Consumers Photo by Getty Images Bank

According to the National Assembly's legislative information system on September 12, the amendment to the Electronic Commerce Act submitted by the Fair Trade Commission in August last year was referred to the second subcommittee of the National Policy Committee in December 2024, but has not been discussed even once since then.

The core of the amendment is the introduction of a domestic agent designation system for overseas sellers. The system would require overseas e-commerce platforms without an address or business office in Korea to appoint a domestic agent, who would be obligated to take necessary measures to resolve consumer complaints or disputes. If violated, a fine of up to 10 million won would be imposed. Overseas e-commerce companies such as Aliexpress, Temu, and Shein would be subject to this requirement.

The Fair Trade Commission believes that, if implemented, the agent designation system would enable more active relief for consumer damages and smoother investigations in disputes arising from transactions on overseas platforms. Until now, the number of consumer complaints related to overseas e-commerce platforms has increased every year due to insufficient consumer protection policies. According to the Korea Consumer Agency, the number of international transaction consumer consultations received in 2024 was 22,816, up about 18% from 19,418 in 2023. This is nearly double the 14,000 cases reported in 2021.

At the legislative review subcommittee of the National Policy Committee held on December 3, 2024, the then-ruling People Power Party called for handling the agent designation system as a single-issue bill, but the Democratic Party lawmakers insisted on processing the entire amendment to the Electronic Commerce Act at once, resulting in the postponement of discussions. No concrete discussions took place at the legislative review subcommittee held in February 2025 either.

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The US's initiation of tariff wars with countries around the world after the launch of the Trump administration also appears to be hampering the passage of this bill. According to the review report on the amendment submitted by the government, the American Chamber of Commerce in Korea (AMCHAM) opposed the amendment, arguing that it goes beyond procedural obligations and effectively requires overseas businesses to establish a substantial business presence in Korea by requiring domestic agents to fulfill substantive obligations as online sellers or intermediaries.

There are also concerns that this may violate the 'prohibition of local presence requirements' principle under the Korea-US Free Trade Agreement (FTA). Article 12, Paragraph 5 of the FTA stipulates that "No party may require a service supplier of the other party to establish or maintain a representative office or any form of enterprise, or to reside, in its territory as a condition for cross-border supply of a service."

In addition to the domestic agent designation system, several bills have been submitted to the National Assembly to strengthen the responsibility of e-commerce platforms for counterfeit sales.

Since the start of the 22nd National Assembly, seven amendments to the Electronic Commerce Act have been proposed to strengthen the responsibility of e-commerce companies for the distribution of counterfeit goods, and three amendments to the Trademark Act have been introduced to require e-commerce companies to take active measures to prevent the sale of counterfeit products.

Last month, Assemblyman Choo Kyungho of the People Power Party sponsored an amendment to the Electronic Commerce Act that would require e-commerce platforms acting as intermediaries in C2C (consumer-to-consumer) transactions to verify identities, cooperate in disputes, and notify consumers. Even if counterfeits are distributed through individual sellers on the platform, the platform must not neglect its management and oversight responsibilities.

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Assemblyman Song Jaebong of the Democratic Party also introduced an amendment to the Electronic Commerce Act to impose obligations on e-commerce platforms to monitor for counterfeit sales, and to require joint compensation by the platform if consumers suffer damages due to fraudulent acts by sellers. A staff member from his office explained, "After the Timon and Wemakeprice (TMEP) incidents, there was a consensus on the need to reduce consumer damage related to e-commerce, and that legal measures are necessary for consumer protection, given the limitations of self-regulation so far."

Assemblyman Lee Cheolgyu of the People Power Party and Assemblyman Kim Jungho of the Democratic Party proposed amendments to the Trademark Act to define e-commerce platforms as online service providers and make them liable for trademark infringement. This aims to strengthen the protection of rights related to trademarks. The bills are based on a 2012 Supreme Court ruling that, if the illegality of a trademark-infringing post is clear, and the operator of an open market is requested by the victim to delete or block it, or if the existence of the post is clearly recognizable, the sale of the product must be prevented.

The e-commerce platform industry argues that these are excessive regulations. They claim to be strengthening monitoring using their own artificial intelligence (AI) systems to eradicate counterfeits and are taking active measures such as suspending sellers who distribute counterfeit goods, but say it is impossible to completely eliminate the vast volume of counterfeits. An e-commerce industry representative said, "We operate AI systems 24/7, 365 days a year, and are using every means to block counterfeits, but counterfeit sellers simply register with different business licenses and return to the platform. If joint liability is imposed on the platform because of a handful of counterfeit sellers, the business itself will inevitably shrink."

K-brand companies argue that the responsibility of e-commerce platforms must be strengthened. They emphasize that even small and medium-sized K-brands are seeing their products counterfeited and distributed through e-commerce, and that active measures are necessary. A representative from a brand, speaking on condition of anonymity, said, "Monitoring for counterfeits is a basic responsibility of e-commerce platforms. Since they also have access to seller information, stronger accountability is needed so that if problems arise due to counterfeits, consumers and brand owners can resolve and address them immediately."

<End of the Counterfeit Onslaught>