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[Alpha Biz= Kim Jisun] Kakao has submitted a voluntary corrective action plan worth approximately 9 billion KRW to the Korea Fair Trade Commission (KFTC) in an effort to avoid sanctions. This comes after the company was accused of forcing partner sellers on its "KakaoTalk Gift" platform to label their products as "free shipping" even when the shipping cost was included in the price and charging additional commission fees on those shipping costs.

On Monday, the KFTC announced its decision to initiate a consent resolution process regarding Kakao's alleged violation of the Large-Scale Distribution Business Act. A consent resolution allows the KFTC to conclude a case without determining a violation if the proposed corrective measures are deemed reasonable for less severe or ambiguous infractions.

Kakao required sellers on its "KakaoTalk Gift" platform to adopt a "free shipping (shipping cost included)" model, denying them the option to choose between free, paid, or conditionally free shipping. Consequently, sellers included both the product price and shipping cost in the final sales price. However, Kakao calculated its commission fees based on the total sales price, effectively charging sellers a commission on the shipping cost. The KFTC has been investigating this practice as a possible demand for unjust economic benefits.

Before receiving the KFTC's examination report, Kakao prepared a voluntary corrective plan worth 9.2 billion KRW. As part of this plan, the company has allowed sellers to freely choose their shipping options. Even if a seller switches from free shipping to paid shipping, customers will still pay the same price without additional charges. Kakao has also committed to supporting sellers by lowering payment gateway (PG) fees, freezing consignment sales fees, and covering marketing costs such as discounts and free promotional cash for advertising.

The KFTC stated that it considered various factors, including sellers’ current preference for free shipping and their awareness of Kakao’s mandatory shipping policy when joining the platform.

This is the first case involving an online shopping platform since the consent resolution system was introduced to the Large-Scale Distribution Business Act in July 2022.

 

 

 

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