Fair Trade Commission Corrects SoCar's Unfair Terms... Removes 100,000 KRW Penalty

Car Sharing Specialist 'Socar' Listed on KOSPI
(Seoul=Yonhap News) On the 22nd of last month, officials are taking a commemorative photo at the listing ceremony of car sharing specialist Socar at the Korea Exchange Seoul Office PR Center in Yeongdeungpo-gu, Seoul. From left: Song Young-hoon, Deputy Director of the Securities Market Headquarters at Korea Exchange; Chae Nam-gi, Chairman of the Korea IR Council; Lim Jae-jun, Director of the Securities Market Headquarters at Korea Exchange; Park Jae-wook, CEO of Socar; Choi Hyun-man, Chairman of Mirae Asset Securities; Lee Ki-heon, Executive Vice Chairman of the Listed Companies Association. August 22, 2022 [Provided by Korea Exchange. Redistribution and DB prohibited]
Photo by Korea Exchange
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[Asia Economy Sejong=Reporter Lee Jun-hyung] Car-sharing company Socar has corrected unfair terms and conditions following criticism from competition authorities.

The Fair Trade Commission announced on the 12th that it reviewed Socar's car-sharing service terms and corrected unfair clauses, including penalties related to failure to report accidents. The FTC received reports that some of Socar's terms were unfair and launched an investigation. In response, Socar voluntarily amended the problematic clauses pointed out by the FTC.

The unfair terms identified by the FTC concerned clauses related to failure to report accidents. Initially, Socar uniformly excluded the application of the vehicle damage waiver system and imposed a penalty fee of 100,000 KRW if customers did not report accidents occurring during service use.

However, the FTC judged that it was unfair to impose uniform sanctions without considering the reasons for customers' failure to report accidents or damages. Consequently, Socar decided to apply the vehicle damage waiver system to customers who failed to report vehicle accidents or damages for justifiable reasons. Additionally, Socar will no longer impose the 100,000 KRW penalty fee for failure to report accidents or damages.

Socar's clause regarding presumed consent and explanation about insurance enrollment was also corrected. Originally, Socar considered that customers agreed to insurance enrollment and coverage amounts when making reservations through the platform or customer center. The FTC found this clause to be unlawful, and Socar deleted it.

The FTC plans to actively correct unfair terms in the shared service sector, including car-sharing. An FTC official stated, "We will strive to ensure fair terms are applied in the rental car sector, which closely affects consumers' daily lives," and added, "If unfair terms are found in shared services such as car-sharing, we plan to correct them."

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