'Onple Law' Passed Cabinet Meeting... Key Issue in National Assembly Debate: Whether to Specify Regulation of 'In-App Payment'

Mandatory Contract Drafting Between Platforms and Tenant Companies
Prior Notice Required for Contract Changes and Terminations
Introduction of Standard Contracts, Fair Trade Agreements, and Consent Decision System
Enforcement One Year After Promulgation

Variable in National Assembly Discussions: Whether to Include 'In-App Payments' in Prohibited Acts
Assemblyman Kim Byung-wook: "Must Specify Clearly"
Fair Trade Commission: "Since 'Forced Purchase Acts' Are Already Prohibited, Regulation Possibility Is Open"

Jongwook Cho, Chairman of the Fair Trade Commission. (File photo)

[Sejong=Asia Economy Reporter Joo Sang-don] The government-proposed 'Act on the Fairness of Online Platform Intermediary Transactions (Onple Act),' which regulates the transactional relationships between online platform operators such as Naver, Google, Coupang, and Baedal Minjok and tenant companies, passed the Cabinet meeting on the 26th. The Fair Trade Commission (FTC), the competent authority, plans to submit this bill to the National Assembly within this week. This marks the beginning of full-scale discussions at the National Assembly level just four months after the legislative notice was issued in September last year. The key issue is whether to explicitly include Google's controversial 'forced in-app payment' as a subject of regulation.

The FTC announced that the Onple Act bill passed the Cabinet meeting on the day. Shin Bong-sam, Secretary-General of the FTC, stated, "Online platforms lead innovation in the digital economy, but due to the characteristics of the two-sided market transaction model and network effects, various adverse effects are also materializing. Therefore, we are promoting the enactment of the Online Platform Fairness Act to improve autonomous trading practices and prevent disputes between platforms and tenant companies."

According to the Korea Consumer Agency, 2,195 cases of online platform-related damage relief were reported last year alone, of which 936 cases (42.6%) have yet to receive compensation. Online platforms, as intermediaries, are not subject to the Large-Scale Distribution Business Act, and the Fair Trade Act lacks provisions requiring contract provision or standard contracts to prevent disputes and improve trading practices.

The Onple Act applies to businesses that provide services mediating transactions between tenant companies and consumers through online platforms, with sales exceeding 10 billion KRW and sales amounts over 100 billion KRW, or amounts specified by enforcement ordinances. The FTC expects that about 30 platforms, including Naver and Google, and 1.8 million tenant companies will be covered. After the Onple Act passes the National Assembly, the FTC plans to investigate market conditions to define more specific application scopes.

The core of the Onple Act is to mandate the drafting and delivery of contracts between platform operators and tenant companies to prevent disputes. Contracts must include essential details such as service content, fees, commencement, restrictions, suspension, and changes of services, product exposure, and damage-sharing criteria. Additionally, when changing contract terms, tenant companies must be notified in advance; service restrictions or suspensions require a 7-day prior notice, and contract terminations require a 30-day prior notice.

For voluntary dispute resolution, provisions are established to form a dispute mediation council and to create a basis for standard contracts. The FTC will conduct written surveys to understand trading practices and tenant companies' difficulties and ensure related information is provided to the market. A consent decision system will be introduced to assist small and medium tenant companies in swift and effective damage relief and to resolve legal uncertainties for businesses early.

With the government proposal of the Onple Act passing the Cabinet meeting, discussions at the National Assembly are expected to intensify. The key issue is how specifically unfair acts restricted by the Onple Act are stated in the law. On the previous day, Assemblyman Kim Byung-wook of the Democratic Party officially proposed the 'Act on the Fairness of Online Platform Intermediary Transactions.' Kim's bill specifies prohibited unfair trade acts as ▲discrimination against users through manipulation of search and arrangement rankings ▲forced use of specific payment methods ▲refusal or delay of settlement payments. The forced use of specific payment methods targets Google's enforcement of in-app payments for all content distributed via Google Play, detailing types of unfair trade practices that have been controversial in the online platform sector.

The FTC also holds the position that since 'forced purchase' is included among prohibited unfair acts in Article 9 of the government bill, the possibility of regulating Google's in-app payments is open. However, since the bill must specify general unfair acts by platform operators, the enforcement ordinance will define unfair acts in more detail in the future.

Assemblyman Kim, the ruling party's secretary of the National Assembly's Political Affairs Committee, proposed the Onple Act with the same name as the government bill to express support for the government proposal and to indicate that the Political Affairs Committee, rather than the Science, Technology, Information and Broadcasting Committee, will lead the Onple Act discussions. Previously, Assemblywoman Jeon Hye-sook of the Democratic Party, a member of the Science and Broadcasting Committee, had proposed the 'Act on the Protection of Online Platform Users' in December last year. That bill requires platform operators to establish terms of use for each online platform service provided to users and report them to the Korea Communications Commission, granting the commission authority to investigate violations and mediate disputes.

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