[Personal Information Protection] Legal issues regarding the Electronic Commerce and Advertisement Law! Why you should check now.

Digital marketing has become a core element of business operations, and regulations to protect consumers and ensure market fairness are also being strengthened. In particular, the 「Act on Fair Labeling and Advertising」(hereinafter referred to as the "Labeling and Advertising Act") and the Act on Consumer Protection in Electronic Commerce, etc. (hereinafter referred to as the "Electronic Commerce Act") have become fundamental laws that both platform operators and brand operators must be familiar with.

Recently, the Fair Trade Commission and other relevant authorities have been continuing to take corrective actions against telemarketers and telemarketing intermediaries for acts that deceive consumers or restrict consumers’ legitimate rights.

In particular, illegal acts such as repeatedly offering "limited-time discounts" or providing restrictive guidance on cancellation rights have been frequently detected among platform operators, and the number of cases where fines and penalties have been imposed has increased accordingly.

This column will introduce representative cases where sanctions have actually been imposed within this trend, and we aim to summarize the legal obligations that telemarketers and telemarketing intermediaries must observe and practical points for review.

1. False Discount Advertising: A Case of Violation of the Labeling and Advertising Act

The Fair Trade Commission recently imposed fines and penalties on a platform operator selling high-priced luxury goods for the following reasons.

The operator repeatedly conducted discount events on the same product while continuously advertising that “the sale is ending soon” or “ultra-low-price time sale for only 0 days,” making it appear that the deadline was imminent. This is a false and exaggerated advertisement that pressures consumers to purchase, violating Article 1, Paragraph 1 of Article 3 of the Labeling and Advertising Act.

Checkpoint 1. ✔ Pay attention to the repetitiveness and expression methods of discount advertising

Therefore, the actual end time of the discount must match the expression used in the advertisement, and if the discount period is repeated indefinitely, the expression “limited” should be avoided.

2. Cancellation Rights, ‘Size Mismatch’ Is Not Allowed? Prohibited Acts Under the Electronic Commerce Act

In addition, a telemarketing intermediary platform provided guidance that "size mismatch" was not a legitimate reason for cancellation rights, even though it was a legitimate reason for cancellation rights under the Electronic Commerce Act, and that refunds were only possible within "7 days," despite being a product directly sold by the business operator's own cybermall. This act is a violation of Article 21, Paragraph 1, Subparagraph 1 of the Electronic Commerce Act, as it is likely to make consumers hesitate or give up exercising their rights.

The Electronic Commerce Act allows consumers to exercise their cancellation rights even after 7 days have passed in certain cases, such as when performance has not been made, so unconditionally limiting the cancellation period to 7 days may be illegal.

Checkpoint 2. ✔ Cancellation right restrictions must be based on statutory grounds

"Refunds for discounted products" and "refunds for size mismatches" are difficult to justify under the Electronic Commerce Act, and guidance must follow the standards of the Electronic Commerce Act.

3. Omission of Country of Origin Is Also Illegal? Violation of Duty to Provide Product Information

As cross-border e-commerce has increased, the obligation to indicate the country of origin has become an important issue. A telemarketer failed to disclose the origin of the product, violating Article 14 of the Electronic Commerce Act.

Checkpoint 4. ✔ Check if the check function is reflected in the items to be checked

Telemarketers must periodically check whether the information about the origin of products is accurately indicated to avoid legal violations.

4. Search Engine Ranking, ‘Unfairness’ of Paid Advertising

A company offered a “value-added option service” to sellers registered on its own cybermall, and sellers who purchased the paid option service were set to be displayed higher in the basic sorting screen, such as "popularity order" or "ranking order."

This method is a violation of Article 21, Paragraph 1, Subparagraph 1 of the Electronic Commerce Act, as it is a deceptive method for attracting consumers, and sellers were displayed higher in the rankings regardless of their actual popularity or quality, and the ranking was based on the payment of fees.

Checkpoint 4. ✔ Transparency in operating paid advertising

Consumers should be clearly informed that the display is paid advertising, and the term "popularity order" should be set to reflect actual consumer preference.

These cases are not specific to certain companies. It warns that carelessness in marketing methods, refund policies, and information disclosure procedures that telemarketers and telemarketing intermediaries commonly use can easily lead to legal violations.

Obligations that platform operators and sellers must both observe,

With Law Firm Bit, an e-commerce legal expert

Law Firm Bit has provided practical advice and dispute resolution services for numerous platforms, brands, and startups in the e-commerce sector.

In particular, it supports the prevention of legal issues that can frequently occur during platform operation, such as prior review of advertising copy, review of terms and conditions, checking of telecommunications sales contracts, and review of advertising messages.

A single misstated notice or advertising copy can lead to millions of won in fines.

If you want to diagnose legal risks in advance and respond systematically, please start checking with e-commerce attorney Law Firm Bit now.

Thank you.

Law Firm Bit