'Onplebeop' Passed in the National Assembly... What Are the Key Issues?

On the 28th, the Fair Trade Commission Proposes the Onple Act to the National Assembly

Jong-wook Cho, Chairman of the Fair Trade Commission. (File photo)

[Sejong=Asia Economy Reporter Joo Sang-don] On the 28th, the Fair Trade Commission (FTC) submitted the "Act on the Fairness of Online Platform Intermediated Transactions" to the National Assembly. A key issue during the National Assembly discussions is expected to be whether to explicitly include Google's recent controversial 'mandatory in-app payment' as a subject of regulation.

The FTC is pushing for the enactment of the Online Platform Fairness Act because 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 becoming a reality. 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 and standard contracts to prevent disputes and improve transaction practices.

The Online Platform Fairness 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 exceeding 100 billion KRW, or amounts specified by enforcement ordinances. The FTC expects about 30 platforms, including Naver and Google, and 1.8 million tenant companies to be included. After the Act passes the National Assembly, the FTC plans to investigate market conditions and define more specific application scopes.

The core of the Online Platform Fairness Act is to mandate the preparation and delivery of contracts between platform operators and tenant companies to prevent disputes. Contracts must include essential details such as service content, fees, service commencement, restrictions, suspension, changes, product exposure, and damage-sharing standards. Additionally, if contract terms are to be changed, tenant companies must be notified in advance; service restrictions or suspensions require a 7-day prior notice, and contract termination requires a 30-day prior notice.

Discussions on the Online Platform Fairness Act will officially begin in the National Assembly. The key issue is how specifically unfair practices restricted by the Act will be stated in the law. On the previous day, Kim Byung-wook, a member of the Democratic Party of Korea, introduced the "Act on the Fairness of Online Platform Intermediated Transactions" as the main proposer. Kim's bill specifies prohibited unfair trade practices as ▲discrimination against users through manipulation of search and ranking order ▲mandatory use of specific payment methods ▲refusal or delay of payment settlements. The mandatory use of specific payment methods targets Google's enforcement of its payment method, such as in-app payments, for all content distributed on 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 'purchase coercion' is included among the unfair practices prohibited in Article 9 of the government proposal, there is a possibility of regulating Google's in-app payment. However, since the bill must specify general unfair practices by platform operators, the enforcement ordinance will define unfair practices in more detail in the future.

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