Legal disputes between e-commerce platforms and users, what are the solutions and directions for improvement?

The essence of the dispute between the e-commerce platform and the user is default.
Institutional supplementation is needed to strengthen legal responsibility.

With the rapid growth of the e-commerce market, the role of the e-commerce platform is becoming more important. However, legal issues arising from transactions brokered by platforms, especially disputes related to payment and consumer protection, continue to appear in a more complex manner. In particular, as various controversies, including payment delays, consumer refund issues, and platform financial instability, have frequently occurred recently, we met with Kim Yu-jeong, an attorney who is active in the e-commerce field, and asked about legal disputes between platforms and users.

Please introduce yourself.

He is a member of Daeryun Law Firm's Fair Trade Group and carries out litigation and advisory work in the areas of e-commerce and fair trade. It mainly deals with various legal issues, including disputes that arise in e-commerce platforms, especially payment issues between platforms and platform users.

Please explain the transaction brokerage process of an e-commerce platform.

When a consumer pays for a product registered by a seller on an e-commerce platform, the platform does not pay the money directly to the seller but deposits it with a payment agency such as a credit card company. After the transaction is completed by the seller delivering the product or providing the service, the platform settles the deposited amount to the seller. If a consumer files a complaint about a product, the platform mediates the dispute and proceeds with the refund or exchange process. At this time, the paid amount is refunded to the consumer through the payment agency. During this process, the platform manages transactions between sellers and consumers and adjusts their respective rights and obligations. This method can be seen as forming a structure that repeatedly creates and destroys debt relationships between sellers and consumers.

How is damage compensated for e-commerce platform users?

E-commerce platform users refer to consumers who purchase products or services and sellers who sell them. If an e-commerce platform does not settle payments to sellers or provide promised services to consumers, users can raise issues through the platform's own customer support center. However, if it is difficult to resolve the issue because the platform does not respond properly, the user may report it to the Fair Trade Commission (hereinafter referred to as the Fair Trade Commission), and the Fair Trade Commission may issue a corrective order or impose a fine. In particular, it is possible for consumers to file a lawsuit for damages against the platform pursuant to Article 17 of the Act on Consumer Protection in Electronic Commerce, etc. (hereinafter referred to as the Electronic Commerce Act).

What do you think about the recent ‘Timon-WeMakePrice incident’?

The Timon-WeMakePrice incident clearly reveals the financial instability of e-commerce platforms and the resulting vulnerability to consumer protection, and suggests the need to legally clarify the platform's responsibility as a transaction intermediary. This is because when a platform fails to fulfill its role, the damage goes directly to the consumer. In particular, I think the biggest problem is the lack of legal mechanisms in a situation that reduces trust between consumers and sellers. Accordingly, it is necessary to mandate transparency of the platform's financial status and fund flow and establish specific systems for consumer protection.

How is the legal responsibility for the e-commerce platform's lack of payment ability defined?

In accordance with Articles 17 and 18 of the Electronic Commerce Act, e-commerce platforms are obligated to pay sales proceeds to sellers and respond to consumers' requests for refunds, regardless of financial status. In particular, if inaccurate information or payment delays related to payment are repeatedly provided in the process of brokering transactions between sellers and consumers, the company may be subject to sanctions such as a fine of up to 100 million won or a corrective order from the Fair Trade Commission under Article 23 of the Fair Trade Act.

To strengthen the legal responsibility of e-commerce platforms.

The current E-Commerce Act restricts the liability of e-commerce platforms, so more specific legal revisions are needed. First, to protect consumers and sellers, an institutional mechanism is needed to warn in advance about fund liquidity problems on the platform. It is also important to establish a payment guarantee system, which protects the payment amount for a certain period of time until the consumer purchases the product and the seller receives payment. In addition, specific legal supplementary measures are needed, such as preparing a plan for payment agencies, which are responsible for managing the flow of money and ensuring the stability of the payment process, to share some of the responsibility for the platform's financial problems.
 

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