"Stricter Store Entry Requirements May Block Small Business Sales Channels"

Industry "Currently Mediating, But Legal Sanctions Could Cause Side Effects"

The Electronic Commerce Act amendment proposed by the Fair Trade Commission is taking shape, prompting the e-commerce industry to be on high alert. This is because regulatory risks could increase amid already fierce survival competition. Some in the industry are concerned that strengthened regulations might harm consumer benefits or restrict small business owners from entering the market.

According to the e-commerce industry, including Coupang, on the 1st, the provisions in the Fair Trade Commission's Electronic Commerce Act amendment, such as distinguishing between direct purchase and intermediary transactions, are currently being implemented independently. In Coupang's case, only direct purchase products are separately classified and displayed under names like 'Rocket Wow' and 'Rocket Fresh.' The industry also recognizes that platforms are continuously expanding their scope of responsibility in intermediary transactions. In this context, there are concerns that formalizing regulations through the Electronic Commerce Act could lead to other problems.

First, the industry pointed out that measures to strengthen platform responsibility could make entry requirements more stringent, ultimately blocking sales channels for small business owners. An industry official explained, "It is difficult to say that platforms are excluded from responsibility for problems arising in intermediary transactions. They are mediating the situation, but if sanctions are imposed by law, it could result in damages such as restrictions on small business owners' market entry."

Contrary to the legislative intent to improve situations where platforms, as intermediaries, shift various responsibilities onto vendors and ignore consumer damages, there are concerns that consumer choice could be limited instead. According to a recent survey by the Federation of Korean Industries, 55.1% of consumers hoped that business regulations on online shopping platforms would not be introduced. When asked why they hoped regulations would not be introduced, the highest response was to protect consumer benefits (70.6%).

The industry believes that if e-commerce platforms are hampered by regulations, it could negatively affect future industries that have grown due to the expansion of non-face-to-face (untact) consumption amid COVID-19. Last year, e-commerce companies experienced rapid growth due to COVID-19, but competition intensified, worsening profitability. In this situation, if regulatory risks emerge, growth momentum could be lost. An industry official emphasized, "With the distribution environment rapidly changing, balanced legislation that considers consumers, small business owners, and future industries is necessary."

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