Postponed Political Affairs Committee... There Was a Bill to Prevent the 'Meoji' Incident (Comprehensive)

Revised Bill to Strengthen Online Platform Responsibility Stalled in National Assembly
Discussion Schedule Delayed, Has Yet to Reach Plenary Session
Legislative Action Could Have Minimized Damage from MergePoint Scandal

[Asia Economy Reporter Song Seung-seop] It has been found that bills that could have prevented the Merge Point incident were blocked by partisan conflicts and were not even brought to the committee for consideration. Among the regulatory targets were e-commerce companies that mediated the sale of Merge Points. The National Assembly, which criticized the financial authorities for poor management and supervision, neglected its primary role of handling livelihood-related bills, thus failing to prevent consumer damage.

According to related industries on the 23rd, earlier this year, the Fair Trade Commission pushed for a complete revision of the "Act on Consumer Protection in Electronic Commerce (E-commerce Act)." The main point was to strengthen responsibility so that online platforms, including e-commerce companies, cannot evade responsibility by claiming they merely mediated sales. Online platforms must quickly identify the causes and damages when consumer harm occurs and bear joint responsibility together with tenant companies.

The consent decision system was also established. The consent decision system is a mechanism where a business operator proposes corrective measures such as remedying consumer damage and restoring the original state, and the Fair Trade Commission promptly concludes the case after gathering opinions. Since most consumer damages occurring on online platforms are minor and difficult to proceed to litigation, the introduction of this system has the advantage of quickly remedying consumer harm.

The government’s background for pushing the bill was the surge in consumer damage due to online platform transactions. According to the Korea Consumer Agency, the number of online transaction damage relief applications, which was only 10,331 in 2016, increased to 16,974 by the end of last year. During the same period, the number of consultations related to electronic commerce at the 1372 Consumer Counseling Center under the Fair Trade Commission surged from 142,327 to 214,872.

The government predicted that the bill would provide strong protection for consumers. At the time, Fair Trade Commission Chairman Cho Sung-wook explained, “Online platforms do not just mediate; they establish relationships with tenant companies, receive subscriptions, collect payments, and handle deliveries,” adding, “The message is that online platforms should bear responsibility in proportion to their involvement.” He further explained, “If the platform is found to have intentional or negligent fault, it must compensate; if not, it can exercise subrogation rights against tenant companies,” and predicted, “Consumer damage will be significantly reduced.”

Consumer groups and experts also emphasized the necessity. Kang Jung-hwa, president of the Korea Consumer Federation, said at a National Assembly public hearing last month, “If the amendment imposes an obligation to cooperate in damage handling, it can prevent situations where platform companies take no action.” Professor Jeong Shin-dong of Gangneung-Wonju National University’s Department of Law also analyzed, “The current E-commerce Act does not sufficiently resolve consumer issues occurring online,” and “A full revision, not just partial amendments, is urgently needed.”

If the Bill Had Existed, Merge Point Damage Could Have Been Minimized... “Backdated Administration Must Be Eradicated”

There is much analysis that if the bill had passed, the damage from Merge Points could have been prevented. This is because the responsibility of e-commerce companies such as Tmon, 11st, and Wemakeprice, which earned commissions by mediating sales, would have been strengthened. Currently, these companies claim no responsibility as intermediaries. Under current law, if intermediaries inform consumers of their status, they are effectively not liable for consumer damage. Some companies have provisions for subrogation claims but do not enforce them. There is also no separate damage investigation or announcement.

Nevertheless, most related bills submitted to the National Assembly’s Political Affairs Committee are effectively stalled. When the Fair Trade Commission was pushing the bill, it predicted in response to media criticism that “it would be submitted to the National Assembly by June” and expected that “many lawmakers showed interest, so it would pass the National Assembly soon.” When asked if discussions would likely focus on bills proposed by lawmakers in the first half of the year, the commission even said, “We see no reason to oppose.” However, among the five bills currently proposed, four have not even been brought to the committee. A bill led by Democratic Party lawmaker Yoon Kwan-seok was submitted to the committee on June 22, but it still has a long way to go before passage.

In the Political Affairs Committee, the schedule for bill processing has repeatedly been delayed due to partisan differences. From March to April, attention was focused solely on the “Public Officials Conflict of Interest Prevention Act” amid allegations of real estate speculation by LH employees and executives. The committee repeatedly stalled amid controversies over the Integrity Commission’s political neutrality. From May to June, conflicts arose among the ruling and opposition parties, the Financial Services Commission, and the Bank of Korea over the “Electronic Financial Transactions Act (EFT Act) amendment.” Despite criticism of the Financial Services Commission over the Merge incident, the Political Affairs Committee failed to promptly legislate, leading to accountability discussions.

On the 20th, both ruling and opposition parties jointly condemned the financial authorities at the National Assembly Political Affairs Committee plenary session. Lawmaker Kim Byung-wook criticized, “The financial authorities’ response that they cannot manage or supervise (Merge Points) because it is an unregistered business activity is an irresponsible statement that no citizen can understand.” Lawmaker Kang Min-guk also questioned, “Can the public accept that the financial authorities did not even recognize a prepaid payment business operator with accumulated issuance worth about 100 billion won?”

Experts pointed out that the National Assembly’s “closing the stable after losing the cow” approach must be eradicated. Professor Kim Dae-jong of Sejong University’s Department of Business Administration emphasized, “There have been many damages caused by backdated administration,” and stressed, “Efforts to prevent such damages through legislation in line with changing environments before harm occurs are necessary.”

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