Core 'Pre-Designation' of Platform Act Under Review...Invalidation of Unfair Construction Special Agreements

Fair Trade Commission Reports 'Key Business Promotion Plan'
Including Increase in Mobile Gift Certificate Refund Amounts

The Fair Trade Commission (FTC) is reconsidering the enactment of the 'Platform Competition Promotion Act (Platform Act),' which designates giant platform companies as dominant operators in advance, from scratch. In response to strong industry opposition to the core 'pre-designation' method of the bill, the FTC has decided to gather opinions and seek alternatives.

On the 8th, the FTC reported the '2024 Major Work Promotion Plan' containing these details to the Presidential Office. First, it will thoroughly review alternatives to the pre-designation method, which was the core of the Platform Act, with academia and experts to establish a reasonable regulatory framework. The bill will still include prohibitions on four frequently occurring unfair practices in the market: self-preferencing, tying sales, restrictions on multi-homing, and forced most-favored-nation treatment.

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Additionally, the FTC will focus on inspecting and closely scrutinizing violations of the Fair Trade Act by platform companies in areas such as music streaming, video advertising, and online shopping. It will strengthen the management responsibilities of platform operators by easing the conditions for issuing temporary suspension orders, allowing platform companies to immediately halt transactions with businesses suspected of violating the law.

The FTC will also establish a stable transaction foundation for small and medium-sized enterprises (SMEs) and small business owners. By amending the Subcontracting Act, it will nullify the judicial effect of unfair special contracts in the construction sector and focus on unfair practices unique to the construction industry, such as non-payment through unfavorable retention money settings. The FTC stated, "The intention is to prepare various protective measures centered on industries where SME damages are a concern."

Furthermore, to provide swift relief to companies harmed by technology misappropriation, the FTC will introduce a 'private party injunction system' into the Subcontracting Act, allowing direct court requests for correction of legal violations without going through the FTC. In the webtoon and web novel sectors, the FTC will correct unfair contract terms that restrict creators' rights and promote the establishment and revision of standard contracts to ensure fair distribution of profits.

Efforts will also be made to improve the business conditions of small business owners. The FTC aims to eradicate the practice where franchisors designate too many essential items or unilaterally raise prices under the pretext of maintaining brand consistency. When franchisors expand the scope of essential items or change pricing methods disadvantageously for franchisees, legal provisions or guidelines will be established to mandate consultation with franchisees. To reduce unfair practices such as shifting promotional costs to small suppliers, punitive damages will be introduced, and the cap on fixed fines will be raised to strictly punish unfair practices that burden suppliers or dealerships.

In addition, regarding 'shrinkflation,' which is rampant in the era of high inflation, the FTC will revise related notices to mandate prior disclosure to consumers about changes in product volume. The refund amount for mobile gift certificates such as Gifticons, which is about 90% of the purchase amount, will be increased, and the validity period of reward points will be extended.

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