Open Market Terms Overhauled: Platforms Now Liable for Hacking Incidents They Once Denied Responsibility For

Problematic clauses in open market platforms' terms and conditions that stipulated "no business liability" for personal information leaks due to hacking and similar incidents will be largely eliminated. Additionally, unreasonable practices such as platforms evading all responsibility on the grounds of being intermediaries, or confiscating the cash balances of withdrawing members, will also be rectified.

Seven open market platforms ordered to correct unfair terms and conditions by the Korea Fair Trade Commission. Photo by Oh Yukyo.

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On the 27th, the Fair Trade Commission announced that it had reviewed the terms and conditions of seven major open market platform operators-Coupang, Naver, Gmarket, 11st, Nol Universe, SSG.com, and Kurly-and corrected 11 categories of unfair contract clauses that unreasonably exempted business operators from liability or infringed on user rights and interests.

The core of these corrections is to block platforms from evading their responsibilities. Until now, most open market platforms included clauses that unconditionally exempted them from liability in the event of security incidents such as hacking or virus leaks, regardless of whether the business operator was at fault.

The Fair Trade Commission has revised these terms to clearly state that businesses will be held liable if there is intent or negligence on their part. The Commission determined that unconditional exemption from liability-for example, "Even if the company fulfills its security obligations, it is not responsible for any accidents"-is unfair. Furthermore, many clauses that categorically denied all responsibility on the grounds that the platform is merely an intermediary connecting sellers and buyers have also been substantially revised. The scope of liability is now clearly defined so that platforms must provide compensation if there is intent or negligence on their part.

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Unreasonable practices related to user convenience have also been significantly improved. First, the clause that caused paid cash balances to be immediately forfeited without a refund process when a member withdrew has been corrected. Going forward, businesses must provide guidance on refund procedures for any remaining paid cash, even upon withdrawal. In addition, practices by some platforms, such as Coupang, whereby the business operator could arbitrarily select an alternative payment method (such as Coupang Cash) if the designated payment method failed, have been prohibited. This change reflects concerns that such practices infringed on consumers' right to choose their payment method.

Clauses disadvantageous to partner sellers have also been improved. Platforms must now clearly specify the grounds for withholding settlement payments, preventing delays for vague reasons. The unfair clause that limited jurisdiction exclusively to the business operator's local court (such as the Seoul Southern District Court) has been revised to comply with civil procedure law. Furthermore, the notification process for changes to terms and conditions has been strengthened, so that users are adequately informed, rather than being deemed to have automatically consented if they do not explicitly object.

The Fair Trade Commission stated, "As online shopping becomes increasingly common, clearly defining the scope of platform responsibility will help prevent actual consumer harm. In particular, these changes will ensure that platforms fulfill their duties as administrators, especially in incidents such as personal information leaks and other security breaches."

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