'Preventing Timeff Incident' Payment Must Be Settled Within 20 Days... Applicable to Transactions Over 100 Billion Won

Fair Trade Commission Announces Amendment Plan for the Large-scale Retail Business Act

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From now on, online intermediary transaction platforms (e-commerce) with intermediary transaction amounts exceeding 100 billion KRW must pay the sales proceeds to the tenant businesses within 20 days after the consumer confirms the purchase. Measures are also being promoted to require that more than 50% of the sales proceeds be deposited in financial institutions so that tenant businesses can recover part of the sales proceeds even if the platform goes bankrupt.

On the 18th, the Fair Trade Commission announced a plan to amend the Large-scale Distribution Business Act containing these provisions. The businesses subject to the law are online intermediary transaction operators with domestic intermediary transaction sales of 10 billion KRW or more or intermediary transaction amounts of 100 billion KRW or more.

They must settle the sales proceeds directly or through payment gateway companies (PG companies) with the tenant businesses within 20 days from the date the consumer confirms the purchase. This takes into account that the average settlement period for businesses subject to the law is 20 days.

In cases where services such as accommodation or performances are provided after purchase, settlement must be made within 10 days based on the actual date the consumer uses the service. However, if the platform or PG company does not receive the sales proceeds three business days before the settlement deadline, settlement can be made within three business days from the date of receipt of the proceeds.

If the platform directly manages the sales proceeds, the amendment plan also includes a provision requiring that more than 50% of the sales proceeds be separately deposited in financial institutions or that payment guarantee insurance be subscribed.

The deposited sales proceeds cannot be seized, and it is basically prohibited for the platform to transfer or provide them as collateral. Even if the platform company goes bankrupt, the sales proceeds will be paid to the tenant businesses first and repaid before other creditors.

Devices to ensure fairness and transparency in the transaction relationship between platforms and tenant businesses, such as the use of standard contracts, have also been prepared.

The Fair Trade Commission decided to provide a one-year grace period after the promulgation of the law so that businesses can prepare for the new law. The settlement deadline for sales proceeds will be gradually shortened from 40 days to 30 days and then to 20 days, and the ratio of separately managed sales proceeds will also be gradually increased from 30% to 50%.

A Fair Trade Commission official said, "Once this amendment is legislated, the transaction safety and reliability of numerous tenant small businesses will be enhanced, and the fairness of the online intermediary transaction market will be strengthened."

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