Obligations of Communication Sales Intermediaries: Key Guidance Seen Through Fair Trade Commission Decisions

Recently, the Fair Trade Commission (hereinafter "FTC") has publicly disclosed through a press release its actions of issuing corrective orders and imposing fines on online platform companies providing used goods transaction platforms, accommodation brokerage services, and the like. The FTC has taken the above measures against actions failing to fulfill the obligations of a communication sales intermediary as stipulated in the "Act on Consumer Protection in Electronic Commerce, etc." (hereinafter "Electronic Commerce Act").

With the emergence of various online business models, the legal status and responsibilities of communication sellers, communication sales intermediaries, and cybermall operators are becoming increasingly important. Particularly in a business environment centered around platforms, there are numerous cases where companies fail to properly recognize their legal status and overlook obligations under the Electronic Commerce Act.

Communication Sellers and Communication Sales Intermediaries

According to the Electronic Commerce Act, a 'communication seller' refers to an entity that provides information and sells goods or services through methods such as postal and telecommunications. Furthermore, a 'communication sales intermediary' refers to an entity that brokers transactions between an entity selling goods or services (a communication seller, etc.) and a consumer. This commonly refers to a 'platform operator.' The Electronic Commerce Act provides regulations regarding the information provision obligation, scope of liability, advertising responsibility, and determination of responsible parties in the event of a dispute for communication sellers and communication sales intermediaries.

Communication Seller vs. Communication Sales Intermediary – The Importance of Distinction

The distinction between a 'communication seller' and a 'communication sales intermediary' under the Electronic Commerce Act is not merely a matter of nomenclature. It decisively influences the scope of legal responsibility in transactions, the intensity of consumer protection obligations, and the determination of fault in the event of a future dispute.

A communication seller is an entity directly selling goods or services, and is a party to a contract with a consumer.

A communication sales intermediary plays a role of providing a connection between the transaction parties, and is not originally a direct contractual party, but may bear certain liability if it violates the notification and information provision obligations stipulated in the Electronic Commerce Act.

For example, if a communication sales intermediary fails to notify a consumer of the identity of the communication seller, resulting in a situation where the consumer is unable to contact the actual seller, the intermediary may be held partially responsible.

Obligations of a Communication Sales Intermediary under the Electronic Commerce Act

Obligation to Verify and Provide Identity Information of the Communication Sales Requestor (Article 20(2) of the Electronic Commerce Act)

If the requestor is a business entity, a communication sales intermediary must provide the requestor's name (if the requestor is a corporation, the name of the corporation and the name of the representative) and address and phone number to the consumer before the offer is made.

Obligation to Priorly Notify that it is not a Party (Article 20(1) of the Electronic Commerce Act)

A communication sales intermediary must clearly notify consumers that it is not a party to the communication sale. Failure to do so may cause consumers to misunderstand that the platform is the party to the transaction, which may lead to uncertainty in determining legal responsibility in the event of a subsequent dispute.

Obligation to Display Terms of Use, etc., on the Initial Screen of a Cybermall (Article 10(1) of the Electronic Commerce Act)

A cybermall operator must link the operator's name, representative's name, address, and terms of use to the initial screen so that users can easily confirm them.

The online transaction environment is becoming increasingly diverse. While previously, online shopping malls and open markets were the norm, now numerous forms of online business are emerging, such as used goods transaction platforms, accommodation brokerage platforms, professional service matching platforms, and content marketplaces. In this environment, accurately recognizing the legal status and responsibilities of a communication sales intermediary or cybermall operator is no longer an option but a necessity.

Checklist for Platform Companies and Cybermall Operators

Violation of the Electronic Commerce Act is not limited to incurring fines. The content of the FTC's order can be publicly disclosed through the media, or lead to consumer disputes, which can negatively affect brand trust and investment attraction. Therefore, it is necessary to proactively check risks based on the checklist below.

✅ Whether the platform is a communication sales intermediary

✅ Establishing a system to verify whether the seller is a business entity and whether a business entity registration and communication sales registration has been carried out

✅ Whether seller information and terms and conditions are sufficiently provided to consumers before the offer is made

✅ Whether it expressly notifies that it is not a selling party

✅ Whether the terms of use and business information can be easily confirmed on the initial screen of the cybermall

✅ Whether the notification system is consistently applied across each platform, such as mobile web/app/PC

✅ Whether to support communication sales/intermediary registration and reporting procedures

✅ Whether to support FTC corrective measures and investigation response strategy

Platform companies often argue, "We are merely intermediaries," in an attempt to avoid various responsibilities. However, the Electronic Commerce Act recognizes the status of an intermediary while also imposing corresponding obligations to provide information and notification. This reflects the platform's influence and structural responsibility.

Veat Law provides ongoing legal advice on compliance with the Electronic Commerce Act and the Personal Information Protection Act to various IT platforms, startups, and e-commerce companies, including advice on service structure design at the initial planning stage, setting business/consumer classification criteria, structuring membership agreement, standardizing cybermall operator notification, and reviewing display location.

In particular, Veat Law provides customized advice and action plans tailored to the service model of each client through the "LegalTune" personal information center page, going beyond simply interpreting legal texts. We comprehensively consider UI/UX implementation methods, consumer flow, and service usage stages to help reduce practical risks.

Thank you.

Veat Law