Online Shopping Malls' Unfair Practices Worsen... Fair Trade Commission to Strengthen Monitoring

Fair Trade Commission Announces 2019 Written Survey Results on Distribution Sector

[Sejong=Asia Economy Reporter Joo Sang-don] It was found that the rate of experiencing unfair practices in online shopping malls is high in almost all types of violations, such as delayed or non-payment of product sales proceeds, shifting of promotional expenses, demands for sales incentives, and demands for exclusive transactions.

On the 1st, the Fair Trade Commission announced the results of the '2019 Distribution Sector Written Survey'.

The Fair Trade Commission conducted a survey from October to December last year targeting suppliers (7,000 companies) trading with major large-scale distributors (23 companies).

As a result, the proportion of respondents who said that unfair trade practices by large-scale distributors had improved compared to the previous year was 91.3%, slightly down from 94.2% in 2018, but still over 90%.

It was found that 98.4% of the responding companies use standard transaction contracts when dealing with large-scale distributors. Regarding the shifting of promotional expenses, 4.9% of respondents experienced this, which is 4.6 percentage points lower than the previous year (9.5%).

The experience rates of unfair practices such as delayed or non-payment of product sales proceeds (5.7%), demands for sales incentives (economic benefits) (5.2%), and shifting of promotional expenses (4.9%) remained high. Other unfair practices such as reduction of product payment (2.4%), demands for exclusive transactions (2.4%), delayed or non-issuance of written contracts (2.1%), and use of supplier employees (1.1%) had relatively lower experience rates.

By business type, the rate of experiencing unfair practices in online shopping malls was the highest in almost all types of violations. The response rate for experiencing unfair practices such as receiving payment for product sales proceeds more than 40 days after the monthly sales closing date or not receiving payment at all averaged 5.7%, but was highest in online at 12.9%. The experience rate of shifting sales expenses averaged 4.9%, but reached 9.8% in online.

A Fair Trade Commission official said, "As the distribution market structure is being reorganized centered on online channels recently, it is time to shift the focus of measures against unfair distribution practices from offline to online." He added, "We plan to promptly prepare fair trade guidelines for new types of distribution channels such as online shopping malls and T-commerce, and strengthen monitoring of legal violations."

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