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[Kim & Chang Legal Newsletter 2017 Issue 2] Amended Enforcement Decree of the Telecommunications Business Act Now Effective, Specifically Classifying and Regulating Certain Prohibited Acts of Telecom Service Providers

20 Jul 2017

The Enforcement Decree of the Telecommunications Business Act (the “Enforcement Decree”), which was partially amended on December 30, 2016, went into effect on January 31, 2017.


Summary of newly-created prohibited acts that apply specifically to online service providers:


The Enforcement Decree specifically classifies and regulates certain prohibited acts of telecommunications service providers pursuant to Article 50 of the Telecommunications Business Act.


Among the many newly-created prohibited acts under the amendment, the following summarizes those that specifically apply to online service providers.


1) Installation of software that is not critical to the primary functions of telecom equipment (e.g., smartphones)
 
The amended Enforcement Decree prohibits the installation – and even the recommendation – of software that is not critical to the primary functions of telecom equipment, such as smartphones. It further prohibits any unfair limitations on the ability to uninstall such software or to install other software.
 
The purpose of this restriction is to prevent any software (including pre-installed applications) that is not critical to the primary functions of smartphones from unfairly limiting the ability of consumers to delete such software, and to prevent pre-installed software from unfairly limiting the ability of consumers to install other software.
 
We anticipate greater scrutiny over pre-installed applications in the near future.
 
2) Imposing unfair terms or limitations on service providers seeking to use another telecom service provider
 
The amended Enforcement Decree also prohibits unfair terms or limitations on service providers that desire to use another company’s telecom services, such as mobile communications networks and platforms, to provide their own service.
 
The purpose of this restriction is to prevent telecom service providers, such as mobile communications network providers and platform providers, from discriminating against, or unfairly limiting the services of, other telecom service providers that are seeking to use their telecom services to provide consumers with a different service.
 
The specific types of prohibited acts under this regulation will be separately announced by the Korea Communications Commission, and unlike other restrictions under the amended Enforcement Decree, this regulation went into effect as of July 1, 2017. We believe that regulators may now focus on issues, such as net neutrality, disparate treatment by platform providers, and how search service providers rank their search results.
 
3) Misleading consumers by unfairly commingling advertisements with other information
 
Misleading consumers by unfairly posting advertisements embedded within other information without clearly distinguishing between the two types of information is also prohibited under the amended Enforcement Decree.
 
The purpose of this new restriction is to prevent consumer confusion when advertisements and other content and information are combined with one another.
 
Please note that this regulation only prevents the commingling of advertisements with other types of information in order to avoid misleading consumers, while other acts of deceptive or false advertising will continue to be subject to other laws, such as the Fair Labeling and Advertising Act.
 
4) Unfairly limiting the ability to delete certain advertisements
 
A new restriction has been included to prevent measures that unfairly limit the ability to delete advertisements from the screen, which obstruct or hide other information when the advertisement is distributed, posted or sent to the consumer.
 
There are many instances when online service providers, while distributing, posting or sending advertisements together with other information, post the advertisement in a manner that hides the other user-requested information.
 
The purpose of this regulation is to prevent acts that unfairly limit the ability to delete advertisements on the screen that hides such user-requested information.
 
In light of this new restriction, online service providers should ensure that users should have a means to delete the advertisement from the screen when the advertisement is rendered together with other types of information.




Dong-Shik Choi
dschoi@kimchang.com
Hyun-Kyu Lee
hyunkyu.lee1@kimchang.com