South Korea orders major open-market platforms to curb overly broad liability waivers

South Korea’s competition watchdog ordered corrective steps against what it called overly broad liability waivers used by open-market operators, including clauses that exempt a platform even when fault is shared between the company and users. It also revised provisions that had broadly waived intermediary responsibility on the grounds that the platform was not a direct party to contracts.

The Fair Trade Commission said on the 27th it reviewed the terms of service of seven major open-market operators, including Coupang, Naver and Kurly, and corrected 11 types of unfair clauses across four areas: improper exemptions and limits on damages liability; arbitrary exercise of platform operating authority; disadvantages tied to settlement for sellers and refunds for consumers; and other terms unfavorable to users.

The commission said the action is intended to strengthen platform accountability and better protect users’ rights as the domestic e-commerce market has expanded rapidly and open markets have become an essential distribution channel.

First, it moved to fix clauses that improperly exempt or shift responsibility for protecting personal information. Open-market operators have a duty to securely collect and store users’ personal data, such as names and contact information, gathered during transactions. The commission said some terms had effectively freed operators from responsibility for incidents such as data leaks regardless of whether the company was at fault.

It also corrected clauses that broadly waived a platform’s intermediary responsibility. The commission said platform operators that broker transactions between sellers and consumers have a manager’s duty to help ensure transactions are safe and smooth. It said terms will be revised so operators are not exempt when they are at fault, rather than being uniformly shielded because they did not directly participate in contracts.

In addition, the commission said it was unfair to exempt a business whenever a user bears any fault in cases where responsibility is shared. When both sides are at fault, it said, liability should be allocated according to each party’s share of responsibility.

Other clauses to be corrected include provisions that prioritize separate operating policies over the terms; allow unilateral changes to payment methods without user consent; unfairly delay settlement of sales proceeds to sellers; require users to waive restoration claims when canceling membership; and unfairly differentiate refund conditions based on subscription billing cycles.

The commission said the measures were aimed at having major open-market platforms voluntarily correct unfair terms that had been applied unilaterally to users by leveraging superior bargaining power. It said it will continue to review and correct terms to create a safer environment for platform users and improve unfair trading practices.