Five major OTT providers levied fines

Five over-the-top (OTT) media service providers including Netflix and YouTube have been fined 19.5 million won for interfering with their users’ cancellation of subscription. Some businesses notified their users that they cannot withdraw from their services although they are allowed without having to pay an extra cost. The decision will make it easier OTT service users to unsubscribe going forward.

The Fair Trade Commission (FTC) announced on Sunday that it would issue a correctional order to five OTT service providers – Google, Netflix, KT, LG Uplus and Content Wavve – and fine them 19.5 million won for violation of the Act on the Consumer Protection in Electronic Commerce. Google and Netflix are supposed to pay 7 million and 3.5 million won, respectively, while KT, LG Uplus and Waave are levied 3 million won each. 　

Google, Netflix and LG Uplus informed that subscribers to their video streaming service may not withdraw once a contract is signed, adding that it is possible to unsubscribe only in the subsequent month of their subscription. However, the Act on the Consumer Protection in Electronic Commerce stipulates that consumers may cancel their request of subscription and get a full refund anytime within seven days of their purchase of a service on the condition that they have not since viewed any content.

Google and Netflix did not provide their consumers with information about a period for withdrawal or how to unsubscribe, which has limited consumers’ rights to cancellation of subscription according to the FTC.

KT, LG Uplus and Content Waave did not allow their subscribers to cancel, terminate or modify a service agreement while making it easy to join membership and sign a contract online. Instead, users have been able to terminate their subscription only by calling their customer service center in person. As per law, e-commerce business owners, who allow subscription and contract signing online, shall make it possible for their consumers to terminate and change a contract online as well.


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