Ensuring fair trade in the platform sector by combating deceptive consumer practices has been at the forefront of President Yoon’s agenda since he took office in May 2022. The National Assembly and the Korean government are actively addressing the issue of “dark patterns” in the online space. Momentum to regulate such deceptive online practices is anticipated to only grow in the coming months.
Read on to delve deeper into the measures undertaken by the National Assembly and the government agencies to confront online dark patterns.
Currently tabled at the National Policy Committee are five amendment bills that concern dark patterns: four that seek to amend the Act on the Consumer Protection in Electronic Commerce (“E-Commerce Act”) and one that seeks to amend the Personal Information Protection Act (“PIPA”).
|Proposed amendment to the E-Commerce Act (proposed in April 2023)
|Mandates e-commerce businesses to notify consumers of changes in the fee arrangement (i.e., converting free trials to paid subscriptions) or increased charges, and to indicate the total price to be paid by consumers. The bill also bans drip pricing, bait-and-switch, preselection, roadblocks to cancellation, and nagging (explained in further detail below).
|Proposed amendment to the E-Commerce Act (proposed in March 2023)
|Prohibits e-commerce businesses from inducing consumers into consenting to automatic payments, processing recurring payments without consent, or interfering with account termination.
|Proposed amendment to the E-Commerce Act (proposed in July 2022)
|Mandates e-commerce businesses to design a UI that can help prevent harm arising from user mistakes.
|Proposed amendment to the E-Commerce Act (proposed in June 2022)
|Prohibits e-commerce businesses from interfering with consumers making informed decisions through UI designs or alterations or manipulation thereof.
|Proposed amendment to the Personal Information Protection Act (proposed in February 2023)
|Prohibits personal information controllers from collecting personal information by inducing consumer to make unintended decisions or decisions that undermine the consumers’ rights.
Establishing regulatory measures to control online dark patterns was a common policy goal found in 2023 work plans announced by numerous government bodies, including the Fair Trade Commission (“KFTC”), the Personal Information Protection Commission (“PIPC”), and the Korea Communications Commission (“KCC”).
The most notable development in this regard was the KFTC’s release of the Guidelines on the Voluntary Management of Online Dark Patterns (“Guidelines”) on July 31, 2023. The Guidelines were released to implement the “Policy Direction for Protecting Consumers from Online Dark Patterns” the KFTC announced in April 2023. The Guidelines classify dark patterns into 4 major categories and 19 distinct types. They apply to e-commerce transactions subject to the E-Commerce Act and online labeling and advertising regulated by the Labeling and Advertising Act.
Types of Dark Patterns and Recommendations for Businesses
As with many other guidelines, the Guidelines are not legally binding, although its release may certainly be a first step to wider regulations. In fact, following its release of the Guidelines, the KFTC has made it clear that it is contemplating measures to ensure effective regulation of the dark patterns, including by amending current laws and regulations to set out the necessary legal basis for regulatory enforcement and by conducting fact-finding investigations into companies that are suspected of aggravating user harm through their use of dark patterns.
Heightened regulatory scrutiny likely down the road
Recently, the PIPC and the KCC have also reaffirmed their determination to prepare effective regulatory measures to combat dark patterns. Specifically, the PIPC Chairman strongly criticized the dark patterns as a new evil and expressed his intention to take steps to amend relevant laws. Similarly, the KCC pledged to examine consumer harm resulting from dark patterns. Active regulatory efforts by the KCC, possibly leading to the formulation of a policy scheme to better address the harms resulting from the dark patterns, are thus also expected.
Given the National Assembly and the Korean government’s keen interest in the businesses’ use of dark patterns, it is advised that companies closely monitor developments within the National Assembly and the government bodies as it appears likely that companies engaging in deceptive practices through dark patterns will face more scrutiny going forward.