In the appeal of the cancellation suit filed by lodging platform Yanolja HereNow against the Korea Fair Trade Commission's corrective order and penalty surcharge, the dispute over who effectively bears the expense of discount coupons intensified. Whether the discount coupons are Yanolja HereNow's own promotional expense or an expense borne by partner businesses that purchased advertising products is expected to determine whether the Fair Trade Act was violated.
The Seoul High Court on the 26th held the first hearing in the cancellation suit filed by Yanolja HereNow against the Korea Fair Trade Commission (FTC) over a corrective order. The Korea Fair Trade Commission (FTC) had earlier imposed a corrective order and about 1 billion won in penalty surcharge, saying Yanolja HereNow's "advertising product + discount coupon" structure shifted disadvantages to partner businesses.
The structure the Korea Fair Trade Commission (FTC) takes issue with is one in which, when an accommodation business purchases an advertising product, the platform attaches a discount coupon and offers it to consumers, and any remaining amount is extinguished without being returned to the business even if the coupons are not fully used. The Korea Fair Trade Commission (FTC) also notes that the coupon validity period is short, making it difficult to use the full amount in practice.
The Korea Fair Trade Commission (FTC) sees the structure as one where, although it appears on the surface that the platform is offering a discount benefit, in reality the coupon expense is reflected in the advertising fee, making partner businesses the ones bearing it. In the end, because the discount event was run at the partner businesses' expense and the unused portion was not returned, it constitutes using transactional status to confer a disadvantage, the commission says.
By contrast, Yanolja HereNow argues the discount coupons were merely a promotional tool provided at its own expense and separate from the advertising products. It says the advertising fee and the coupons are structurally separated, and because the platform spent additional expense to provide consumer benefits, partner businesses cannot be seen as having borne the coupon expense.
In court that day, the focus also centered on who bears the expense. The Korea Fair Trade Commission (FTC) argued the coupon expense was included in the advertising fee, citing factors such as the coupon amount increasing as the price of the advertising product rose. Yanolja HereNow countered that coupons are not items for sale but merely a promotional tool, and that partner businesses never separately purchased them.
The bench framed the case as an issue of legal assessment rather than a dispute over facts. It indicated that the decisive question is whether the discount coupons are an expense included in the advertising product or a separate marketing expense borne by the platform.
The legal community sees this case as potentially affecting promotional structures across the e-commerce industry beyond lodging platforms. The bench ordered additional organization of issues and set the next hearing for May 21.
Meanwhile, legal disputes over dispositions by the Korea Fair Trade Commission (FTC) effectively treat the commission's decision as the first instance. Accordingly, cancellation suits over such dispositions proceed under the exclusive jurisdiction of the Seoul High Court under the Fair Trade Act, making that day's hearing the first judicial step.