Netflix Targeted by Fair Trade Commission: "Unilateral Fee Change Terms Are Unfair"

Correction of 6 Types of Unfair Terms and Conditions... Effective from the 20th

[Sejong=Asia Economy Reporter Joo Sang-don] Netflix, the world's number one video service provider (OTT), has revised its terms and conditions to obtain consent when changing fees and memberships. This follows the corrective recommendation from the Korea Fair Trade Commission (KFTC).

The KFTC announced on the 15th that it reviewed Netflix's terms of use and ordered the correction of such unfair terms and conditions.

The six terms deemed unfair by the KFTC in Netflix's terms include: ▲ provisions that enforce fee changes without customer consent ▲ unclear reasons for termination or suspension of member accounts ▲ provisions that hold members fully responsible for incidents beyond their control (such as account hacking) ▲ provisions limiting members' rights to claim damages ▲ unilateral transfer or assignment of membership contracts ▲ provisions that consider the entire agreement valid even if some clauses are invalid. Netflix voluntarily corrected these terms and plans to implement the changes starting from the 20th.

Until now, Netflix's terms stipulated that fee and membership changes would take effect from the next billing cycle as long as the changes were notified to members without obtaining their consent. The KFTC judged this as an unfair clause that arbitrarily applies fees set by the business to customers regardless of their intention, deeming it 'invalid.' Accordingly, Netflix improved its terms to notify and obtain consent for fee changes.

Additionally, reasons for terminating or suspending member accounts, previously vaguely defined as 'violation of terms of use,' 'participation in fraudulent services,' or 'other fraudulent acts,' have been specified to include illegal copying, identity theft, and unauthorized credit card use.

Netflix's terms previously held members responsible for all activities occurring on their accounts regardless of whether the member used the account. This has been revised to hold members responsible only when they use the account.

A KFTC official stated, "This is the first time a global OTT provider's terms have been corrected by a competition authority worldwide," adding, "As new global and domestic entrants are expected in the OTT sector, we plan to continuously review and correct unfair terms at the early stages of business."

This content was produced with the assistance of AI translation services.