An amendment to the Act on the Consumer Protection in Electronic Commerce (the “E-Commerce Act”) that strengthens regulations on online dark patterns is set to take effect on February 14, 2025.
The current E-Commerce Act provides for a general prohibition against “providing false or exaggerated information or using deceptive means to solicit customers, engage in transactions with consumers, or prevent consumers from cancelling orders.” Therefore, there has been controversy over what types of dark patterns are subject to the E-Commerce Act.
Accordingly, in April, 2023, the KFTC issued the “Policy Direction for Protecting Consumers from Online Dark Patterns” (the “Policy Direction”), to classify specific types of dark patterns and identify those that are difficult to regulate under the existing law and require further legal basis. The amendment to the E-Commerce Act introduces provisions for regulating five of the six types of conduct that are identified as “difficult to regulate” under the existing law in the Policy Direction.
The key details of the amendment are as follows:
In order to prevent dark patterns, the amendment requires prior consent from consumers when increasing subscription fees or converting free trials to paid services (addressing the so-called “hidden renewals”). It also prohibits the following five types of dark patterns, while imposing administrative fines for violating the new provisions targeting dark patterns:
-
Gradual disclosure of costs: Displaying or advertising a lower price on the initial search results page, and then revealing previously hidden costs only at the final step of the checkout process (without a justifiable reason)
-
Pre-selection of purchase options: During a product purchase process, soliciting consumers to make additional purchases by having other products pre-selected by default
-
False hierarchies: Deceiving consumers into believing that a particular option is the only available choice by displaying the other possible options in a significantly different size, shape and color
-
Obstruction of cancellation or withdrawal: Interfering with cancellation/unsubscription by consumers without justifiable reason by making cancellation/unsubscription complicated or different from the sign-up process
-
Repeated interference: Interfering with consumers’ decision-making process by repeatedly asking them (e.g., through pop-up windows) if they want to change a selection or choice they have already made
We expect further details of the regulation to be specified through subordinate regulations and the official interpretations by the KFTC. These will include (i) the method of obtaining prior consent or informing consumers of an increase in service fees or free-to-paid conversion, (ii) what is considered a “justifiable reason” (for the obstruction of cancellation/unsubscription), and (iii) other matters specifically delegated to the subordinate regulations (for cases of repeated interference).
The KFTC has repeatedly expressed its commitment to regulating online dark patterns. In July 2023, the KFTC issued the “Guidelines on Self-Regulation for Dark Patterns,” which distinguish (i) dark patterns that can be regulated under existing laws from (ii) those that would require a separate statutory basis. Further, in November 2023, the KFTC announced the results of its survey on dark patterns in the e-commerce industry (conducted in cooperation with the Korea Consumer Agency).
In particular, the KFTC’s annual enforcement plan for 2024 mentions that it will (i) update the E-Commerce Act to regulate dark patterns, and (ii) proactively regulate the types of conduct that can be regulated under the existing law. Therefore, at this time, companies are advised to conduct an internal inspection to assess the risks associated with dark patterns and take appropriate measures to address those risks.
Going forward, the KFTC is expected to further specify the types of conduct considered as dark patterns through legislative amendments.
