Preventing Mukti... Mandatory Designation of 'Domestic Agent' for Overseas Platforms

Amendment to the Jeonsang Law Passed at the Cabinet Meeting

Overseas platform companies, including Chinese e-commerce platforms that have been controversial for selling counterfeit goods and importing harmful substances, will be required to designate a domestic agent responsible for consumer protection obligations. A consent decision system will also be introduced in the Electronic Commerce Act to increase the rate of relief for small-scale consumer damages.

The Fair Trade Commission announced on the 19th that the amendment to the "Act on Consumer Protection in Electronic Commerce, etc." (Electronic Commerce Act) containing these provisions has passed the Cabinet meeting. This is part of the "Consumer Protection Measures Related to Overseas Online Platforms" jointly announced by related ministries in March. It was prepared to prevent consumer damage and provide prompt relief as side effects such as the sale of counterfeit, harmful, and provocative products and illegal advertising operations by Chinese e-commerce companies like Ali, Temu, and Shein have been occurring one after another.

The amendment explicitly states that overseas platform companies (including telemarketers) without an address or place of business in Korea, whose sales and consumer scale meet certain criteria, must designate a domestic agent in writing. The designated domestic agent must be responsible for consumer damage relief and dispute resolution tasks and will be subject to investigation related to the enforcement of the Fair Trade Act. Overseas businesses that designate an agent must secure valid contact methods, and the domestic agent will be the recipient of document delivery.

To prevent the domestic agent system from being operated merely in formality, the agent must be a person with an address or place of business in Korea. If the overseas headquarters has executives and there is a domestic corporation that exerts dominant influence over business operations, the domestic corporation must be designated as the domestic agent. Additionally, telemarketers who designate a domestic agent must submit the agent’s name, address, phone number, and email address to the Fair Trade Commission and disclose this information on their internet homepage.

If the domestic agent violates the law in relation to fulfilling their obligations, the telemarketer who designated the agent may be subject to corrective orders and fines.

The amendment also includes the introduction of a consent decision system into the Electronic Commerce Act. The consent decision system is a procedure where a business operator proposes a reasonable corrective measure such as restoration or damage relief, and the Fair Trade Commission, after collecting opinions from stakeholders and recognizing its validity, promptly concludes the case without determining illegality. Although it does not make a judgment on illegality, it is evaluated as a means to effectively remedy consumer damage and quickly restore competitive order.

The Fair Trade Commission explained, "When large-scale consumer damage occurs due to deceptive acts against consumers, the business operator can prepare and implement a consumer damage relief plan, allowing consumers to receive prompt relief without filing a lawsuit." Furthermore, if the consent decision is not implemented by the deadline without justifiable reasons, the Fair Trade Commission may impose a daily enforcement penalty of up to 2 million KRW per day.

The amendment to the Electronic Commerce Act, which passed the Cabinet meeting on this day, is expected to be submitted to the National Assembly within this month after the President’s approval. The Fair Trade Commission stated, "By newly introducing the consent decision system, which had only been stipulated in seven laws under the Fair Trade Commission’s jurisdiction, into the Electronic Commerce Act, it is expected that prompt relief will be provided when consumer damage occurs due to business operators’ legal violations."

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