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S. Korean Regulator Directs AliExpress, Temu to Amend ‘Unfair’ Contract Clauses.

Seoul: South Korea's antitrust regulator announced it has issued corrective orders for 47 unfair terms and conditions identified in the operations of two major Chinese e-commerce platforms, AliExpress and Temu. Despite their rapid growth, estimated at around 10 million users in South Korea, largely due to low prices and a wide range of products, these platforms have recently been scrutinized for their business practices, advertising, and handling of customer complaints. According to Yonhap News Agency, the Fair Trade Commission (FTC) found 47 clauses in the platforms' terms and conditions that were considered to unfairly limit consumer rights and excessively exclude the platforms from liability, violating local e-commerce laws and other relevant regulations. The FTC directed the platforms to amend several clauses that restrict their liability to consumer rights and limit compensation for damages. With these corrections, the platforms would now bear responsibility within the limits of their negligence and com ply with South Korean civil law for consumer compensation. Moreover, the FTC highlighted that some terms allowed extensive collection of users' personal data without specifying usage duration and permitted data sharing with third parties without user consent. South Korea's Personal Information Protection Act requires e-commerce platforms to obtain users' consent before transferring personal information and to include consumer complaint procedures in their terms and conditions. The FTC ordered AliExpress and Temu to specify data collection parameters and remove clauses that limit consumers' data protection rights unfairly. Additionally, the existing terms required consumer disputes to be resolved exclusively in overseas courts, with AliExpress specifying Hong Kong and Temu specifying Singapore. The FTC mandated revisions to state that South Korean laws apply to disputes with South Korean consumers. The FTC aims to standardize AliExpress and Temu's terms before Black Friday, expected next week, to effectively protect the rights of South Korea's estimated 13 million overseas shoppers. Direct overseas purchases by South Korean consumers reached 6.8 trillion won (US$4.9 billion) in 2023, up from 5.3 trillion won in 2022, primarily driven by increased online purchases from China through platforms like AliExpress and Temu. While the United States historically held the largest share of South Korean overseas purchases, goods from China accounted for 48.7 percent of the total in 2023.

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