On the 20th, Choi Eun-seok of the People Power Party introduced a revision to the Electronic Commerce Act that would require businesses to inform consumers, before a contract is signed, of the compensation standards when a contract is canceled or not fulfilled due to the business's fault.
In current e-commerce, when a consumer cancels or changes a contract, the penalty and refund standards are explained in detail on online shopping malls and reservation platforms. However, when a contract is canceled or performance is delayed due to the business's fault, it is not easy to find the compensation standards available to consumers in the terms of use or transaction conditions.
For example, ahead of a past BTS concert in Busan, some lodging businesses unilaterally canceled existing reservations to raise room rates, causing large-scale consumer damage.
To prevent a recurrence of similar damage, the government revised the consumer dispute resolution standards and rolled out after-the-fact measures such as requiring a refund of the deposit and additional compensation equal to 200% of the room rate if a reservation is canceled for the purpose of price increases or resale. However, because the compensation standards applicable when the business is at fault at the reservation stage are not provided in advance, many consumers are not properly exercising their rights.
Even after going through dispute mediation by the Korea Consumer Agency (KCA), it takes considerable time, and because the consumer dispute resolution standards are not legally binding, some cases proceed to actual civil lawsuits.
The revision would require mail-order businesses to indicate, advertise, or notify, before entering into a contract with a consumer, the compensation standards for damages incurred by the consumer due to the business's fault, and to include these in the consumer damage compensation handling details provided after the contract is signed. It allows consumers to confirm their rights at the contract stage in advance and clarifies the business's responsibility.
Choi Eun-seok said, "After-the-fact, stopgap measures have clear limits," and, "We must require transparent disclosure of businesses' compensation standards from before the contract is signed."