Ali, Temu, and Other Chinese Platform Giants Required to Designate 'Domestic Agents'

C-Commerce Offensive Response
'Consumer Protection Measures' Announced
Legislative Notice for Amendment to Electronic Commerce Act This Month
Promotion of Voluntary Management by Platform Companies

Chinese e-commerce companies, which have been controversial for selling counterfeit goods and importing hazardous substances, will be required to designate a domestic agent responsible for consumer protection. A voluntary agreement to have companies self-filter hazardous items that threaten safety will also be promoted within the first half of the year.

On the 13th, the Korea Fair Trade Commission (KFTC) announced the 'Consumer Protection Measures Related to Overseas Online Platforms' at an emergency economic ministers' meeting chaired by Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance. As Chinese e-commerce companies rapidly penetrate the domestic market with massive financial power and aggressive pricing strategies, side effects such as the sale of counterfeit, harmful, and provocative products and illegal advertising have surged, raising urgent calls for government-level improvement measures.

Mandatory Designation of 'Domestic Agents'... Legislative Notice Expected in March

The KFTC will first push for an amendment to the 'Act on Consumer Protection in Electronic Commerce, etc.' (E-Commerce Act) to mandate the designation of a 'domestic agent' for overseas platform companies above a certain scale. The plan is to manage these companies so that they fulfill consumer protection obligations under the E-Commerce Act even if they do not have an address or place of business in Korea.

Lee Kang-soo, Director of the Consumer Transaction Policy Division at the KFTC, stated, "The amendment to the E-Commerce Act mandating the designation of domestic agents for overseas online platforms will be publicly notified for legislation within this month." The designated domestic agents will be responsible for consumer damage relief and dispute resolution and will be subject to investigation related to law enforcement.

For the four major items with high consumer damage concerns, joint responses among ministries will be implemented. The Ministry of Food and Drug Safety will strengthen management by requesting advertising blocks and conducting special inspections on overseas online platforms to block illegal distribution and unfair advertising. To prevent damage caused by counterfeit goods, the Korean Intellectual Property Office and the Korea Customs Service will strengthen counterfeit detection at the customs clearance stage of overseas direct purchases.

Kim Ji-eon, Officer of the Industrial Property Protection Policy Division at the Korean Intellectual Property Office, said, "If the government provides counterfeit monitoring details to overseas online platform companies, a self-purification system will be introduced where follow-up actions are taken and results are reported back. We are currently discussing related matters with AliExpress and Temu."

The Ministry of Gender Equality and Family and the Korea Communications Standards Commission will strengthen checks to ensure that overseas online platforms implement youth protection measures such as age and identity verification when selling adult products to block harmful media for adolescents.

The Personal Information Protection Commission will investigate whether major overseas direct purchase businesses comply with the Personal Information Protection Act, and the Korea Communications Commission plans to check whether overseas online platform operators have notified users about smartphone application (app) access permissions.

Park Se-min, Director of the Consumer Policy Bureau at the KFTC, emphasized, "Although overseas online platforms are subject to domestic laws, it is true that investigations and sanctions regarding compliance are difficult due to physical limitations. However, to prevent consumer damage and establish a fair trade order, the KFTC will faithfully perform its role in investigating and sanctioning legal violations."

Strengthening Consumer Relief through Hotline Establishment... Whole-of-Government Response System

A 'voluntary agreement' for overseas platform companies to self-filter counterfeit and hazardous goods will also be promoted within the first half of the year. The KFTC has been blocking the online distribution of hazardous goods by signing voluntary agreements with the Korea Consumer Agency, seven open markets, and four major secondhand trading platforms, but overseas online platforms had been excluded from these agreements.

Under current law, platform companies are responsible for managing consumer disputes but do not have direct responsibility for products, making it difficult to hold overseas platforms accountable even if consumers suffer damage from purchasing goods through them.

[Image source=Yonhap News]

To resolve small-scale and collective damages, a hotline will be established between controversial Chinese platforms such as Ali and the Korea Consumer Agency. The dedicated window for consumer complaints related to overseas online platforms will be expanded to unify responses for consultation reception and dispute mediation. Additionally, information provision will be activated through channels like 'Consumer 24' so that consumers can be informed about overseas online platform-related information in advance and trade accordingly.

Since consumer issues related to overseas online platforms occur across various areas, the government has decided to establish a whole-of-government response system.

The government's 'Comprehensive Task Force (TF) for Overseas Direct Purchase' including the KFTC plans to propose the enactment of the Consumer Safety Basic Act to effectively respond to the import of hazardous overseas goods and expand the scope of authority.

The KFTC stated, "We will comprehensively review related issues and promote measures at the level of all ministries to prevent consumer damage related to the use of overseas online platforms and ensure that overseas businesses faithfully fulfill consumer protection obligations under domestic law."

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