Reasons for Proposal
With the recent rapid growth of the online retail market and the expedition of the transition to a digital and untact economy due to COVID-19, SMEs and small business owners are increasingly relying on online platforms.
As a result, there is a growing conflict between online platform operators and small and medium-sized merchants in relation to transaction conditions, such as commission decisions and payment of advertising expenses, and thus, there is an increasing need to come up with a mutually beneficial cooperation plan for effective conflict resolution.
However, the Act on Fair Transactions in Large Retail Business does not govern those who engage in online transaction brokerage, and the Monopoly Regulation and Fair Trade Act has been primarily applicable to the offline market as a general law and contains no provisions on mutually beneficial cooperation. The Act on the Promotion of Mutually Beneficial Cooperation between Large Enterprises and Small and Medium Enterprises has been mainly applicable to consigned and entrusted transactions in the offline market, and thus there is a limit to formulating a mutually beneficial cooperation plan to effectively resolve the conflict.
Therefore, the proposal aims to amend the Act on the Promotion of Mutually Beneficial Cooperation Between Large Enterprises and Small and Medium Enterprises to contain the mutually beneficial cooperation and rights relief between online platform operators and small and medium-sized businesses, reflecting the characteristics of online platform transaction brokerage.
Details
A. Newly create definitions for online platform, online platform transaction brokerage, online platform operator, online platform merchants, etc. (Article 2 subparagraphs 12 through 16).
B. Allow the Minister of SMEs and Startups to organize and operate a mutually beneficial council for online platforms composed of online platform operators and online platform merchants to promote mutually beneficial cooperation in the field of online platforms, to create operation headquarters in the corporations or organizations set under the Ministerial Ordinance of SMEs and Startups, and to provide necessary support (Article 20-7).
C. Allow online platform operators and an online platform merchants to conclude mutually beneficial agreements to pledge improvement of transaction conditions and mutual cooperation and support (Article 20-8).
D. Prohibit online platform operators from requesting or raising the commission without any reasonable cause, delaying the payment in relation to the sale of goods, etc., without any reasonable cause, and suspending the transaction or giving other disadvantages because an online platform merchant has requested to hold a mutually beneficial council and similar requests (Article 20-9).
E. If an online platform operator has a dispute with an online platform merchant for matters in connection with the online platform operator's compliance with requirements, allow the online platform merchant to request the Minister of SMEs and Startups to mediate the dispute, require the Minister of SMEs and Startups to review the details if requested to mediate the dispute without delay and issue a corrective recommendation or order if necessary, and announce the order and abstract thereof if the online platform operator who has been issued with the corrective order fails to comply therewith. (Article 20-10).
F. Allow the Minister of SMEs and Startups to investigate at least once a year to verify the status of mutually beneficial cooperation and commissions in the online platform field, and whenever deemed necessary to verify whether the online platform operator has failed to comply, to disclose the status of mutually beneficial cooperation and commissions verified through the investigation, and to require the online platform operator to make improvements for matters that require improvements for any violation, and if the request is not met, require the Minister to make the applicable announcement (Article 20-11).
G. Allow the Minister of SMEs and Startups to provide rewards or other necessary support to online platform operators in comprehensive consideration of the performance of mutually beneficial agreements and implementation, the promotion of mutually beneficial cooperation according to the factual survey, and the right relief for online platform merchants (Article 20-12).
