“When you apply this body cream, your breasts get bigger. It eliminates swelling and eliminates cellulite (the subcutaneous fat that makes the skin look bumpy).”
This is a case of exaggerated advertisement for cosmetics on a live commerce broadcast (Labang) introduced by the Korea Consumer Agency. Consumers’ opinion is that there is a high concern that consumers will misunderstand the efficacy due to these expressions that hosters use in Labang. In addition, while promoting a massage device, it was viewed as an unjust advertisement saying that “it removes waste” or “effective in preventing aging, promoting metabolism, and preventing adult diseases” in a poultice advertisement.
Source: Korea Consumer Agency
As a result of monitoring 120 broadcasts broadcast from five live commerce platform companies, this problem was found in a quarter (30 cases). As the problem of Rabang’s unfair labeling and advertisement grows, discussions on the regulation of Rabang are in full swing. Although the popularity of Labang is increasing, it is judged that consumer protection devices are insufficient because it is a’blind spot’ of broadcasting and communication regulations.
According to a report on’Live Media Commerce Issues and Future Tasks’ by the Fair Trade Commission, Korea Communications Commission and the National Assembly Legislative Research Office on the 27th, live commerce is a compound word of live streaming and e-commerce, introducing products through live broadcasting on the Internet and mobile. Sell. From the customer’s point of view, real-time comments are available for communication, and from the seller’s point of view, fees are cheaper than TV home shopping, which is rapidly growing.
Source: Kyobo Securities
In particular, as shopping is limited due to social distancing due to the novel coronavirus infection (Corona 19), Labang, which combines the advantages of various online transactions, is in the spotlight. Accordingly, not only platform powers such as Naver and Kakao, but also large and small and medium-sized companies in various industries such as CJ, SK Store, KT, Baedal People, and Coupang are jumping into the market.
The problem is that since it is a new platform, it has not yet been equipped with legal sanctions or consumer protection mechanisms to regulate it. Labang has a similar content format to TV home shopping. It provides information and sells products with celebrities, broadcasters, professional show hosts, and famous BJs.
Hong Nam-ki, Deputy Prime Minister of Economy and Minister of Strategy and Finance (middle), appeared in the live commerce of the’Korea Companion Sale’ in July last year to promote clothing products. Ministry of Strategy and Finance
However, unlike TV home shopping, it is free from regulations, prior deliberations, and obligations to protect consumers. It does not pay a fixed fee for transmission and broadcast development. This is because it does not use broadcasting, which is a public good.
The’Consumer Protection Act in e-commerce, etc.’ and’The Act on the Labeling and Advertising of Food, etc.’ are applied, but follow-up management regulations are applied. Due to the nature of simultaneous broadcasting by various operators on multiple live commerce platforms, it is difficult to properly look into it.
In addition, if there is a problem with a product, TV Home Shopping is responsible for cancellation, refund, and damages as a’mail-order seller’, but the platform operator in Labang is a’mail-mail sales broker’ and can be free from responsibility.
Results of’Live Commerce and TV Home Shopping Consumer Perception Survey’ conducted by the Korea Consumer Agency. Korea Consumer Agency
Legislative investigator Kim Yeo-ra of the National Assembly Legislative Investigation Department said, “There is a problem where the responsibility for consumer damage occurs is not clear, and there is little restriction on expression when broadcasting, so there is also a risk of false exaggerated advertising. He pointed out that there is a lot of use of, but damage can be caused by indiscriminate commercial content.”
As voices of concern over regulatory equity and consumer damage are growing, politicians are also pushing for legislation to reduce this. Independent lawmaker Yang Jeong-suk proposed an amendment to the E-Commerce Act that imposes an obligation for live commerce operators to preserve broadcast images by means of recording, and to provide a method for consumers to view and preserve the video.
Until now, it was difficult for consumers to obtain Labang greening, so it was difficult to prove the damage when receiving a product different from the original product description, but the aim is to improve this. Rep. Yang said, “A new measure is needed that takes into account the characteristics of live commerce.”
Results of a survey conducted by the Korea Consumer Agency for the development of live commerce. Korea Consumer Agency
The FTC and the Korea Communications Commission are also preparing a bill to strengthen the responsibilities of live commerce platform operators. An official from the FTC said, “Even though the Labang platform operators are actually involved in the transaction process such as payment and delivery, under the current law, it is possible to escape the legal network by simply telling the consumer that the contractor is not a party to the contract.” “We are looking into the revision of the e-commerce law in depth.”
An official from the Korea Communications Commission also said, “Rabang can only deliberate on illegal and harmful information, and it is difficult to regulate false and exaggerated advertisements, so legislation is necessary.” I said.
However, there is not little backlash. As in the case of the mobility platform’Tada’, government regulations can shrink an industry that is just growing. In the live commerce industry, it is a position to come up with self-rescue measures by establishing channels to mediate consumer-seller disputes and expanding self-monitoring personnel. Rather, an alternative to induce competition by easing regulations on TV home shopping is also being proposed.
Kyung-Jeon Lee, a professor at the Department of Business Administration at Kyunghee University, said, “It is necessary to prepare minimum regulations to reduce confusion for business as well as consumers. “There shouldn’t be any restrictions in the selling process,” he advised.
Sejong = Reporter Son Hae-yong [email protected]
