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Title	KCC SEEKING CORRECTIVE MEASURES AND PENALTY SURCHARGE FOR ALIEXPRESS’S INFRINGEMENT ON USER INTERESTS
Date	2024-11-05	Read	12622
KCC SEEKING CORRECTIVE MEASURES AND PENALTY SURCHARGE FOR ALIEXPRESS’S INFRINGEMENT ON USER INTERESTS Sending a proposal for corrective measures concerning violations of the Telecommunications Business Act, including inducement of paid memberships The Korea Communications Commission (KCC, Acting Chairperson Kim Tae-kyu) has completed its factual investigation into violations of the Telecommunications Business Act (“Business Act”) concerning the online commerce platform AliExpress ("Ali"), run by China's Alibaba Group. The KCC notified two relevant businesses based in Singapore - Alibaba.com Singapore E-commerce Private Limited and AliExpress E-commerce One Ptd. Ltd. ? of a proposal of corrective measures on October 30. The KCC found Ali’s tactics undermining user interests after investigating into Ali’s subscrption and cancellation processes for its paid membership: Notification of false or exaggerated information about its membership benefits and subtle inducement for paid payments (dark pattern), and a policy of refunding the annual membership fee with coupons. A dark pattern refers to a user interface subtly designed to deceive users online. 1. Notification of false or exaggerated information and failure to verify the user's intent to subscribe (Enforcement Decree of the Telecommunications Business Act [Table 4] Subparagraph 5 (b) (i) and Subparagraph 5-2 (a)) Ali offers two types of paid membership: where the annual membership fee is immediately paid upon subscrption, providing membership benefits for an additional 30 days (1 year + 30 days), or where a 30-day free trial period is provided, during which only cashback and 24-hour customer service benefits are available, and after which all membership benefits are available upon payment of the annual membership fee. In the case of Type ②, it attracted users through notification of false or exaggerated information that users could use ‘discount coupons for products’ during the free trial period, contrary to the fact that they could not. In addition, a "Get Coupons" button was displayed for Type ② membership users, who were not allowed to use discount coupons for products. When they clicked the button, they were prompted to switch to Type ① and pay the annual membership fee. 2. Acts Limiting Users' Right to Cancel (Enforcement Decree of the Telecommunications Business Act [Table 4] Subparagraph 5 (b) 10) Ali restricted users' right to cancel their membership without justifiable reasons by refunding the remaining balance of the annual membership fee with coupons usable only at Ali, instead of refunding to the existing payment methods upon early cancellation. Note: Ali corrected some of their violations, such as implementing refunds for cancellations made by credit card at the time of the KCC’s investigation. 3. Acts of Not Notifying Important Matters at Contract Conclusion (Enforcement Decree of the Telecommunications Business Act [Table 4] Subparagraph 5-2 (b)) Furthermore, important information that users should know during the payment process for the membership - the annual membership fee being paid and restrictions on using discount and refund coupons - was not notified to users. The KCC plans to gather opinions from the business operators regarding these violations and finalize corrective orders and the magnitude of penalty surcharge through deliberation and decision-making processes. This investigation is part of measures to safeguard users against increasingly sophisticated and complex online dark patterns. The KCC plans to toughen up monitoring of Telecommunications Business Act violations by business operators of e-commerce and other platforms, and respond strictly to any future violations. ### The Korea Communications Commission
File	20241030_News_Release_Ali.docx 241030 (보도자료) 방통위, 알리 익스프레스의 이용자 이익 침해에 대한 시정조치 및 과징금 부과 추진.pdf

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