[Bills in Focus] Network usage fees, consumer protection from foreign online platforms

Pending Bill: Partial Amendment to the Telecommunications Act

Proposed by Rep. Jun Hye-sook (Independent)

●Recently, concerns have been raised over the low network usage fees paid in Korea by global IT firms, such as Google and Facebook, compared to what these operators pay in other countries, such as those in the EU. Critics argue that this discrepancy constitutes discrimination against domestic value-added telecommunication business operators.

The networking provision relationship between network providers and global IT firms is determined through individual negotiations, which is a process often opaque to concerned authorities. Moreover, there is a lack of legal grounds to regulate potential unfair practices related to network usage and provision.

This Amendment expands the scope of prohibited acts to include adding unfair or discriminative restrictions to network usage or provision agreements. It also grants the Korea Communications Commission the authority to conduct factual surveys to assess the current status of network provision or usage and to help establish fair competition innetwork usage and provision.

Promulgated Bill: Enforcement Decree of the Industrial Cluster Development and Factory Establishment Act

Competent Authority: Ministry of Trade, Industry and Energy

● This bill aims to improve and supplement deficiencies identified in the operation of the current system. It simplifies the calculation method for determining the development profits of an industrial complex improvement project by replacing the previous method of subtracting the total operating cost (including construction costs) from the gross gains (including profits from selling buildings) with a calculation based on the increased value in land prices between the date of application for project approval and the date of application for the authorization of the completion of construction.

This bill also aims to ease the burden on business operators intending to reinvest their development gains by specifying that if the amount reinvested from an industrial complex structure improvement project’s profits surpasses 10 million won ($7,220) and the project implementer and agent submit a guarantee or an insurance policy before the date of authorization for the completion of the project, they may postpone the reinvestment period by up to three years or divide the reinvestment across a range of five years.

Administrative Announcement: Partial Amendment to the Act on Consumer Protection in Electronic Commerce

Competent Authority: Fair Trade Commission

● Korea has recently been facing issues with consumers in light of the increasing online purchases from overseas sellers by Korean consumers, as well as the reliance on foreign platforms. Specifically, there has been an increase in the number of complaints and disputes raised by Korean consumers, such as refused returns and refunds.

This amendment enables the imposition of consumer protection duties on foreign business operators by mandating the designation of domestic agents. It also implements a consent order system where the business operator must provide corrective measures to ensure consumers receive swift and effective relief for damages caused by consumer deception.

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The Korea Herald republishes a weekly legislative report by local law firm DR & AJU LLC to provide the latest information on bills approved, proposed, pending and set to be promulgated. -- Ed.

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For any queries about the bills, contact cr@draju.com.