Fair Trade Commission Chairman: "On-site inspection at Tmon and Wemakeprice today... Initiating collective dispute mediation"

The Fair Trade Commission will conduct an on-site inspection of TMON and WEMAKEPRICE on the 25th regarding the delay in settlement of sales proceeds. A collective dispute mediation procedure to remedy consumer damages will also be initiated soon.

At a press briefing held at the Government Complex Sejong on the same day, Han Ki-jung, Chairman of the Fair Trade Commission, stated regarding the delay in settlement of sales proceeds by TMON and WEMAKEPRICE, "We will promptly grasp the situation through on-site inspections of TMON and WEMAKEPRICE and soon initiate a collective dispute mediation procedure to remedy consumer damages."

The Fair Trade Commission is known to send investigators to the headquarters of the two companies in the afternoon to conduct on-site inspections related to the incident and secure relevant statements.

TMON and WEMAKEPRICE, the 6th and 7th largest e-commerce platforms in Korea, have failed to settle payments to sellers for over half a month, causing travel agencies, home shopping, and department stores to consecutively suspend and cancel product sales. As payment cancellations and refunds are blocked, consumer damages have greatly expanded, causing significant market confusion.

Regarding the increasing consumer damages, Chairman Han said, "To promptly remedy consumer damages, we will establish a dedicated response team at the Korea Consumer Agency and begin preparations to initiate collective dispute mediation."

The number of consumer damage consultations related to TMON and WEMAKEPRICE received by the Korea Consumer Agency has rapidly increased, reaching 254 cases on the 23rd and 1,300 cases on the 24th. The Fair Trade Commission plans to initiate collective dispute mediation procedures if the number of applications exceeds 50.

According to Article 68 of the Framework Act on Consumers, if 50 or more people suffer damages, they can enter collective dispute mediation procedures. Upon deciding to initiate collective dispute mediation, the Fair Trade Commission will announce the start of the procedure on the Korea Consumer Agency’s website, and a mediation decision will be made within a maximum of 90 days from the end of the announcement period.

However, the compensation recommendations by the Consumer Agency are not legally binding. Since both TMON and WEMAKEPRICE are in a state of complete capital erosion with severely deteriorated financial conditions, and their parent company Qoo10 also has poor financial resources, swift compensation is expected to be difficult if the companies refuse to comply.

As the delay in seller settlements by TMON and WEMAKEPRICE causes increasing harm to consumers, purchasing customers are visiting WEMAKEPRICE headquarters in Samseong-dong, Seoul on the 25th to submit refund requests. Photo by Heo Younghan younghan@

Regarding calls for sanctions against the e-commerce platform companies following this incident, Chairman Han stated, "The issue of platform operators delaying or failing to settle payments to tenant companies is a civil debt default matter, making it difficult to intervene under the Fair Trade Act or other laws under the Fair Trade Commission’s jurisdiction."

While government-level support to remedy consumer damages is possible, it is difficult to investigate and sanction TMON and WEMAKEPRICE under the Fair Trade Act, the Electronic Commerce Act, or other laws under the Fair Trade Commission’s jurisdiction.

On the criticism that the Fair Trade Commission approved Qoo10’s acquisition of WEMAKEPRICE despite Qoo10’s poor financial condition, he explained, "Merger reviews assess whether the merger is likely to restrict competition. At the time of review, the combined market share was only 3.35%, so it was approved unconditionally."

He added, "Whether the acquiring company has sufficient financial capability is not a factor considered in the merger review, so it was not assessed."

Meanwhile, the Fair Trade Commission previously conducted an on-site investigation of Qoo10 for alleged violations of the Electronic Commerce Act by another affiliate under Qoo10. A Fair Trade Commission official explained, "That investigation was related to whether Qoo10 fulfilled its reporting obligations under the Electronic Commerce Act or deceived consumers through false or exaggerated advertisements, and is unrelated to the current incident."

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