It has been 19 years since "consumer group lawsuits," in which consumer groups demand that corporations stop or prohibit acts that infringe on consumer rights and interests, were introduced, but only eight cases have actually been filed. Unlike ordinary lawsuits, consumer group lawsuits can be filed only with court approval. On the 22nd, it was learned that the Korea Fair Trade Commission plans to push to revise the Framework Act on Consumers to abolish the court approval system for consumer group lawsuits.
◇ Consumer group lawsuits possible only with court approval… "Indiscriminate lawsuits could dampen corporate activity"
Consumer group lawsuits were introduced into and implemented under the Framework Act on Consumers in Jan. 2008. When corporations directly infringe on consumers' rights and interests regarding life, body, or property, and the infringement continues, consumer groups can file suit. Eligible consumer groups must have at least 1,000 full members and have been registered under the law for more than three years. If the court accepts the consumer group's claims in the lawsuit, the consumer rights-infringing acts of the corporations that are the target of the suit are halted or prohibited.
There has also been a case won. The Korea Consumer Federation filed a consumer group lawsuit against KT in 2015 and won in part at the Supreme Court in 2023. The Korea Consumer Federation argued that KT infringed on consumer rights and interests by operating terms and conditions that did not guarantee a cooling-off right for a certain period and restricted cancellations for customers opening mobile phone service.
However, consumer group lawsuits are set up to make filing itself more difficult than ordinary lawsuits. This is because the law provides that procedures can proceed only if the court recognizes that "there is a public-interest need to protect the rights and interests of a large number of consumers and prevent harm, such as when consumers' life, body, or property has been harmed or there is a concern that harm may occur," and grants approval for the suit.
There is a reason court approval is required for consumer group lawsuits. The intent is to prevent indiscriminate filing of suits from excessively discouraging corporate activity.
◇ Korea Fair Trade Commission (FTC) pushes to abolish court approval system and introduce "preventive injunction claims"
There has been some criticism of the court approval system. First, it is pointed out that it effectively blocks consumer group lawsuits. Although consumer group lawsuits were introduced in 2008 and 19 years have passed, only eight cases have actually been filed. The court approval requirements are analyzed as the main cause. Even the consumer group lawsuit that the Korea Consumer Federation filed against KT in 2015 took a year to obtain court approval. There is also criticism that obtaining approval takes time and expense, which is at odds with the purpose of promptly protecting consumer rights and interests.
In this context, the Korea Fair Trade Commission (FTC) sought in 2021 to revise the law to abolish the court approval system, but it failed to pass the National Assembly. Regarding the background of pushing the same legal revision again after five years, an FTC official said, "A series of incidents in which consumer harm occurs on a large scale, such as the Coupang personal information leak, formed the backdrop."
The Korea Fair Trade Commission (FTC) is also pushing to introduce "preventive injunction claims" through the legal revision. Currently, consumer group lawsuits can be filed only when consumer rights and interests have been infringed and the infringement continues. It is not possible to file a suit on the grounds that there is a risk that an infringement may occur in the future. Unlike Korea, Germany and Japan recognize consumer groups' preventive injunction claims.
In response, concerns are emerging in the industry. An industry official said, "If baseless claims go straight to litigation without filtering, corporations will inevitably feel uneasy."