The Fair Trade Commission has initiated sanctions against online video streaming services (OTT) and music streaming service companies for allegedly obstructing consumers from canceling their paid subscription services prematurely.
On the 22nd, according to industry sources, the Fair Trade Commission sent a review report (equivalent to a prosecutor’s indictment) to OTT companies such as Netflix, Wavve, and Watcha, as well as music streaming service companies like Spotify and Bugs, regarding suspected violations of the Electronic Commerce Act.
The Fair Trade Commission determined that these companies made it difficult for consumers to cancel their subscriptions prematurely or failed to properly inform consumers that premature cancellation was possible. As a result, they conducted an on-site investigation in March of this year.
Contract cancellations are divided into premature cancellations and general cancellations. Premature cancellations terminate the contract immediately upon request, and the consumer is refunded for the unused period of the service fee they paid. General cancellations maintain the contract until the end of the usage period, after which it ends, and no refund is possible.
The Fair Trade Commission believes that these companies violated consumer rights by not notifying them of the possibility of premature cancellation. The Electronic Commerce Act prohibits acts that obstruct the withdrawal of applications or contract cancellations through deceptive methods.
The Fair Trade Commission plans to review the case in a subcommittee soon and decide on the presence and extent of sanctions.
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