Minimum of 48,000 people tricked... Fair Trade Commission sanctions Coupang for 'Wow Membership deception'

Wavve, Bugs, Spotify, etc. caught for 'deceptive consumer enticement'

Total fine of 10.5 million won considered self-correction

 [Provided by Fair Trade Commission. DB and reprinting prohibited]

Coupang, Wavve, NHN Bugs, and Spotify will be sanctioned by the Fair Trade Commission for deceptive consumer enticement.

In particular, Coupang is found to have deceived at least 48,000 subscribers into agreeing to the price increase of Wow Membership.

The Fair Trade Commission announced on the 15th that it has decided to impose corrective orders and a total fine of 10.5 million won on Coupang, Wavve, NHN Bugs, and Spotify for violating the Electronic Commerce Act.

The fines per company are 2.5 million won for Coupang, 4 million won for Content Wavve, 3 million won for NHN Bugs [104200], and 1 million won for Spotify. Due to self-correction, no stronger sanctions such as punitive fines were imposed.

Coupang is accused of deceiving existing subscribers into agreeing to the 58% increase in its 'Wow Membership' monthly price from 4,990 won to 7,890 won in April last year, by using deceptive methods on the app's initial screen.

It was found that the 'Agree and continue receiving benefits' option was presented as a large, blue button to easily catch subscribers' eyes, while the 'Do it later' option was placed relatively small in a corner of the screen.

At the product purchase stage, the phrase 'Agree to monthly fee change and purchase' was subtly inserted with the same size and color as the familiar payment button for subscribers.

Due to this deception, some subscribers were found to have unknowingly agreed to the Wow Membership price increase.

Coupang voluntarily corrected the deception and offered withdrawal requests to subscribers who agreed by mistake. A total of approximately 48,000 people applied for withdrawal. It is estimated that the number of deceived individuals is higher, as there may be subscribers who did not apply for withdrawal due to inconvenience or other reasons.

 [Provided by Fair Trade Commission. DB and reprinting prohibited]

Music streaming services NHN Bugs and Spotify were found to have failed to adequately inform users about the terms, methods, and effects of cancellation for paid passes sold on their websites and apps until last year.

Spotify was caught for not properly displaying its identity on the initial screen of its web and app when selling its monthly subscription product, 'Spotify Premium Membership'.

Subscribers of Wavve, an online video service (OTT), and NHN Bugs were found to have been obstructed in canceling their monthly subscription products, as the companies did not properly guide them on how to do so, even though mid-term cancellations were possible.

Coupang, Spotify, Netflix, Watcha, Naver Plus, and Kurly, among others, did not offer mid-term cancellations.

For these services, when a subscriber requests cancellation, only 'standard cancellation' is possible, which stops automatic billing without refunding the already paid usage fees.

The Fair Trade Commission reviewed the illegality of these actions but decided not to impose sanctions for now.

While the Fair Trade Commission's investigators took the position that sanctions should be imposed, the committee, which makes decisions on sanctions, deemed it necessary to postpone its judgment until system improvements are made, citing reasons such as the lack of clear regulations on subscription economy cancellation rights under current laws.

The Fair Trade Commission stated, "We plan to strengthen surveillance of deceptive enticement or trading practices that hinder consumers' rational purchasing decisions or obstruct the exercise of contract cancellation and withdrawal rights, and to impose strict sanctions upon confirmation of legal violations." Yonhap News Agency