KFTC orders Netflix, other OTT firms to provide clear guidelines in charging customers

The Korea Fair Trade Commission (KFTC) ordered over-the-top (OTT) services such a Netflix to inform customers in advance when their free trial ends and turns into a paid membership.

The country's top antitrust watchdog specifically mentioned Netflix in a meeting of the Consumer Policy Committee as among those who should not begin to charge membership fees without prior notification.

According to the Consumer Policy Committee, while Netflix and other players provide a convenient and economic option, potential customers' rights and interests are being violated through opaque practices.

The committee said there was a lack of explanation about the commencement of paid membership programs. Service fees are being increased occasionally without notice, and some even changed the membership program. Additionally, it is difficult to cancel the paid membership, and there were restrictions on refunds.

Netflix offers a one-month free trial to South Korean audiences but requires a payment method to complete registration. It then automatically charges 9,500 won to 14,500 won depending on the membership type after the trial period and the next month billing cycle commences.

The committee also urged the KFTC and the Ministry of Culture, Sports, and Tourism to revise e-commerce laws and guidelines to protect content users.

It also ordered mobile carriers to not impose penalties on customers changing mobile network service, manufacturers to correctly indicate the origin of products, and wireless earphone makers to standardize device performance measurements.

The committee also shared a new plan to strengthen the responsibility of platform operators to promote the creation of a reliable trading environment.