On August 11, the Korea Fair Trade Commission (FTC) announced that it had issued correction orders and levied fines totaling 10.5 million won (approximately $7,699) against four companies—WEVERSE COMPANY, YG PLUS, SM Brand Marketing, and JYP360—for violating the e-Commerce Act. These companies are subsidiaries of South Korea’s four major entertainment agencies: HYBE, YG Entertainment, SM Entertainment, and JYP.
The FTC found that these companies unilaterally shortened the period during which consumers could exchange or return products, such as idol merchandise and albums. Under current law, consumers are entitled to request an exchange or refund within seven days of purchase for a simple change of mind and within three months if the product is defective. However, the companies in question limited the exchange or refund period to just seven days, even in cases where the product was faulty. They also informed customers that exchanges or refunds would not be possible if the packaging was damaged.
Moreover, these companies labeled products sold through pre-orders as ‘custom-made,’ a designation that allowed them to restrict exchanges and refunds further. In instances where product components were missing, the companies did not offer immediate refunds. Instead, they required customers to record a video of the unboxing process and submit it with their claim, effectively placing the burden of proof on the consumer.
A representative from the FTC stated, “It is significant that we identified and corrected these illegal practices in the entertainment industry, which primarily targets teenagers—the main consumers of idol merchandise—who may not be fully aware of their rights under the e-Commerce Act. We will continue to closely monitor for violations in areas that impact teenagers, such as idol merchandise, and will enforce strict penalties for any repeat offenses.”
