Category

Conduct Type

Description

Management Guidelines

Defrauding

Hidden renewals

Renewing service agreements without notifying consumers, when such renewal would result in transitioning free services to fee-based services or charging of higher fees

• Companies should provide consumers with, in an easy-to-understand manner, information on how their service will, after a certain period, transition from being free or provided at a discounted price to a fee-based service or service based on a higher fee, and obtain their prior and express consent on the scheduled transition and automatic payment for the newly charged or higher fee.

• Companies should notify consumers of the time and date of such transition, the change in the fee, and method of payment by email or text message at least seven days before the scheduled transition. (Prior notice is not recommended for automatic payment of a monthly fee when there is no change in the fee amount.)

Gradual disclosure of costs

Intentionally displaying a lower price on the first search results page, then gradually revealing hidden costs as the consumer proceeds to make the purchase, and ultimately charging a higher price that includes the hidden costs

• When displaying the price of a product, companies should display all compulsory costs that the consumer must pay in order to purchase the product. (Compulsory costs include taxes and public charges (e.g., value-added tax) that will be included in the final consumer price, and service charges and cleaning fees that will be included in the price for using an accommodation facility.)

• Companies may gradually disclose costs when the final cost of a product will change depending on the options selected by the consumer, but should indicate this possibility on the first page to enhance predictability.

• Online mall operators should design their user interfaces so that the transaction terms (e.g., product prices) are accurately conveyed to consumers.

• Displaying a discount rate based on a lower-than-actual total price could be seen as a violation of Article 21 (1) 1 of the E-Commerce Act.

Sneak into basket

Adding, without notice, a product not selected by consumers in their online shopping basket, inducing them to make an unintended purchase

• Inducing consumers to make an unintended purchase by sneaking a product they did not select in their online shopping basket could be seen as a violation of Articles 13 (2), 14 (2), and 21 (1) 4 of the E-Commerce Act.

Misleading

False discounts

Displaying false information on discounts to induce consumers to purchase products at higher prices

• Providing consumers with false information on product discounts could be seen as a violation of Article 21 (1) 1 of the E-Commerce Act and Article 3 (1) of the FLAA.

• Companies should provide information relating to discounts (e.g., base price, sales price, discount rate) accurately without exaggerating the discount rate by inflating the base price against which the discount rate is calculated, or by indicating that the current sales price is lower than it actually is (in combination with “gradual disclosure of costs”).

False recommendations

Deleting negative consumer reviews or creating fake positive reviews

• Unilaterally deleting or hiding unfavorable consumer reviews or ratings, or creating fake reviews or ratings that are favorable to the company could be seen as a violation of Article 21 (1) 1 of the E-Commerce Act and Article 3 (1) of the FLAA.

• If the company hires an advertising agency to execute such false recommendations, both the company and the advertising agency will be held responsible for the violation of law.

Bait and switch

Posting content that falsely advertises the sale of products that are not available for sale as “bait” to lure consumers

• Falsely labeling or advertising the sale of products that are not available for sale (e.g., due to lack of inventory) could be seen as a violation of Article 21 (1) 1 of the E-Commerce Act and Article 3 (1) of the FLAA.

• Consumers should be informed as soon as possible if the inventory is suddenly exhausted due to a surge in orders. (The Supreme Court decision 2010Du24371, issued on June 28 2012, confirmed that an open market operator violated the E-Commerce Act by falsely advertising that it had sufficient inventory for five days.)

Disguised advertisements

Exposing consumers to advertisements that are disguised so that they are not recognized as advertisements

• Companies should clearly indicate that content created for advertising purposes by the company or by another business in exchange for monetary compensation is an advertisement.

• Disclaimers that the content is an advertisement should be made in Korean.

• Providing consumers disguised advertisements could be seen as a violation of Article 21 (1) 1 of the E-Commerce Act and/or Article 3 (1) of the FLAA.

Trick questions

Asking consumers questions that trick them into making unintended replies or choices, or that require significant attention to detail to properly understand

• Asking consumers trick questions could be seen as a violation of Article 21 (1) 1 of the E-Commerce Act.

• Companies should design their questions to consumers and their interface layout in a way that enables consumers to clearly understand to which options they have given their consent or not.
  (i) If consumers have to make more than one selection, they should be asked separate questions for each selection that needs to be made, along with being presented with a separate list of options to choose from to ensure that consumers clearly understand what they are selecting.
  (ii) The options for each question should be crafted into easy-to-understand sentences, and the use of double negatives should be avoided.
  (iii) Words that have a clear meaning should be used. The use of words with emotional connotation or ambiguous words that allow different interpretations should be avoided.

False hierarchies

Using a visually conspicuous design to highlight options that are unfavorable to consumers or favorable to the company, thereby misleading consumers to believe that those are the only options available or that their selection is required

• When asking consumers to make a decision between options (e.g., select/refuse, agree/disagree, purchase/cancel), the page displaying the options should be designed so that each option is clearly distinguishable in terms of size, shape, and color.

Pre-selection of purchase options

Pre-select options that are favorable to the company in an inconspicuous manner and induce consumers to inadvertently accept those options without noticing

• When it is necessary for consumers to give their consent or make a decision, the user interface should be designed in a way that requires consumers to take specific action (through a click or screen touch) for their decision to take effect.

• Companies should avoid highlighting an option in an excessive manner that makes it seem like it is the only option.

• When recommending a product to consumers during their process of purchasing or subscribing to another product or service, companies should avoid pre-selecting the option to purchase the recommended item along with the initial recommendation.

Obstructive

Obstruction of cancellation or withdrawal

Prevent consumers from freely cancelling orders, terminating an agreement or cancelling a membership by limiting the means for doing so or making the process more complicated compared to the process for placing orders, entering into an agreement, or joining a membership

• Consumers should be allowed to cancel orders, terminate an agreement or cancel a membership through the same means used for placing orders, entering into an agreement, or joining a membership.

• Allowing consumers to place orders, enter an agreement, or join a membership online, while only allowing offline means (e.g., by visiting an office, phone, mail) for cancelling orders, terminating an agreement or cancelling a membership, or not providing a process to apply for cancellation or termination could be seen as violations of Article 5 (4) of the E-Commerce Act.

• The process for cancelling orders, terminating an agreement or cancelling a membership should be less or at least equally complicated compared to the process for placing orders, entering into an agreement, or joining a membership (based on a comparison of the number of menus or clicks required to complete the two processes).

Hidden information

Concealing, omitting or downplaying important information that is necessary for making informed purchasing decisions as a means to solicit consumers or engage in transactions with consumers

• Falsely informing consumers by concealing, omitting or downplaying important information could be seen as a violation of Articles 13 (2) or 21 (1) 1 of the E-Commerce Act.

• For transactions that occur under certain conditions (e.g., product price, purchase unit, service fee, shipping costs) companies should accurately indicate important information that could influence consumers’ purchasing decisions (e.g., factors for satisfying those conditions, method and time of delivery).

Obstruction of price comparison

Conduct that makes it difficult to compare the prices or sales conditions of various products

• Online sales brokers (e.g., platform operators) are not responsible for the obstruction of price comparison caused by errors in information posted by third-party vendors.

• However, online sales brokers should make efforts to design their user interface (e.g., regarding how product information is entered and search results are displayed) in a way that enables accurate comparison of product information.

• Online vendors should make the following efforts to enable accurate comparison of product information by consumers:
  (i) Price comparison information should be provided based on identical terms without applying separate conditions (e.g., whether the payment is made using a particular credit card).
  (ii) If the purchase requires an additional selection of options, price comparison information should be provided so that the final price includes the price that will be added by making such selection.
  (iii) The meaning of the words used should be clear. Use of emotion-appealing or dual-meaning words, which could cause consumers to have a different understanding, should be avoided.

• Online vendors should make the following efforts to prevent consumer harm:
  (i) Online vendors should provide consumers with, in an easy-to-understand manner, information on product exposure standards (e.g., price, sales volume, release date).
  (ii) Online vendors should prevent deceptive transactions that redirect consumers, who have selected a product based on an initial price comparison, to a different product (e.g., in terms of its price, size, volume) that is similar but more expensive.

Click fatigue

Inducing consumers to give up trying to select favorable options or obtain desired information out of exhaustion by requiring an excessive amount of clicks (touches) to make a favorable selection or obtain desired information

• When a simpler process is feasible, companies should avoid deliberately requiring consumers to go through an unnecessary number of menus or to answer unnecessary questions to make their desired purchase.

• Making it too difficult to access or select from menus relating to order cancelation, contract withdrawal or processing of complaints or disputes could also be seen as an act of “obstruction of cancellation or withdrawal.”

Pressuring

Repeated interference

Repeatedly urging consumers (e.g., through pop-up notices), to perform a specific action

• Companies may ask a consumer to confirm a decision he/she has made, but should refrain from asking such questions more than once.

• Notices asking a consumer to confirm a choice or decision he/she has made should provide an option not to receive such notices for at least one week.

• Consumers should be allowed to select which types of notices they will receive (e.g., contract information, advertisements, updates, security alerts).

Emotional steering

Using expressions that appeal to consumers’ emotions to urge them to perform a specific action

• Companies may use expressions that appeal to consumers’ emotions, but not to the extent that would make it difficult for consumers to understand the meaning of such expressions. When giving consumers different options to select from, companies should use neutral expressions, such as “cancel” or “withdraw.”

Limited time offer notification

Indicating that a product can be purchased at a discounted price only during a limited time or period to urge them to purchase the product

• Falsely informing consumers of limited time offers could be seen as a violation of Article 21 (1) 1 of the E-Commerce Act and/or Article 3 (1) of the FLAA.

Low stock notification

Indicating that a product is low in stock or in high demand to urge them to purchase the product

• Falsely informing consumers of the inventory status of a product could be seen as a violation of Article 21 (1) 1 of the E-Commerce Act and/or Article 3 (1) of the FLAA.

• Companies should make efforts to accurately inform consumers about the inventory status of a product. If the inventory is suddenly exhausted due to a surge in orders, the company should notify consumers who have already placed an order of this fact and give them a refund within three business days as is required under Article 15 of the E-Commerce Act.

Notification of other consumers’ activities

Listing the number of times a product was recently viewed or purchased to urge hesitant consumers to purchase the product

• Falsely informing consumers of other consumers’ activities could be seen as a violation of Article 21 (1) 1 of the E-Commerce Act and/or Article 3 (1) of the FLAA.

• Companies should make efforts to accurately inform consumers about other consumers’ activities.