Sanctions on Danggeun Market Co., Ltd. for Violating the E-Commerce Act(2025.3.5)

• Failure to fulfill the obligation of verifying and providing business operator identity information as an intermediary in telecommunication sales
• Failure to comply with the obligation of displaying information as a cybermall operator, resulting in corrective orders and fines

The Korea Fair Trade Commission (hereinafter referred to as "KFTC"), chaired by Han Ki-jeong, has decided to impose corrective orders (compliance orders) and a fine of 1 million KRW on Danggeun Market Co., Ltd. (hereinafter referred to as "Danggeun Market") for failing to fulfill its obligations as an intermediary in telecommunication sales and as a cybermall operator under the Act on the Consumer Protection in Electronic Commerce, etc. (hereinafter referred to as the "E-Commerce Act") while operating the online secondhand trading platform "Danggeun."

Key Violations and Sanctions

The E-Commerce Act requires intermediaries in telecommunication sales to:

1. Verify and provide the identity information of business operators who request intermediary services before a contract is concluded, allowing consumer complaints and disputes to be quickly resolved.
2. Clearly notify consumers on the cybermall’s main page that the intermediary is not the direct seller, preventing consumer misunderstanding regarding the role of the intermediary.

Additionally, cybermall operators must:
3. Display their business identity information and terms of service on the cybermall's main page or through a linked page.

Danggeun Market operates the cybermall "Danggeun," allowing both business operators and individuals to use its platform for secondhand transactions and online sales through business profiles and secondhand transaction boards. Therefore, it qualifies as an intermediary in telecommunication sales.

However, Danggeun Market committed the following violations:

1. Failure to verify and provide business operator information
   • On the "Danggeun" platform, business operators sold goods or services under labels such as "Local Ads" or "Ads" without Danggeun Market verifying and providing their identity information (such as name, address, business registration number, and telecommunication sales registration) before the transaction.
   • As this violates Article 20(2) of the E-Commerce Act, the KFTC has issued a compliance order to Danggeun Market.
   Regarding the issue of verifying and providing personal seller information (such as name, date of birth, and address), the KFTC has decided to conclude its review without issuing a ruling due to:
   • The difficulty of distinguishing between face-to-face and non-face-to-face transactions within the platform, as only the latter falls under telecommunication sales.
   • Privacy concerns over excessive data collection and disclosure to buyers.
   • The need for further regulatory adjustments, as reflected in the KFTC's 2024 work plan to refine the personal information collection scope for C2C platforms.
2. Failure to notify consumers that Danggeun Market is not the direct seller
   • Despite being an intermediary in telecommunication sales, Danggeun Market did not clearly indicate on the main page that it was not a direct seller.
   • As this violates Article 20(1) of the E-Commerce Act, the KFTC has issued a compliance order to Danggeun Market.
3. Failure to display business information as a cybermall operator
   • Danggeun Market operates the cybermall "Danggeun" for transactions between individuals and between businesses and consumers. However, it did not display its business identity information (such as company name, representative’s name, address, phone number, email, business registration number, and hosting service provider information).
   • Additionally, it did not provide a direct link to its terms of service on the main page.
   • As these actions violate Article 10(1) of the E-Commerce Act, the KFTC has issued a compliance order and imposed a fine on Danggeun Market.

Significance of the Sanction

This decision ensures that online secondhand trading platforms fulfill their obligations under the E-Commerce Act by:

• Verifying and disclosing business operator identity information to consumers.
• Preventing consumer misunderstanding regarding the role of intermediaries.
• Enhancing compliance with cybermall operation standards.

By enforcing these obligations, the KFTC aims to reduce consumer harm and improve trust in online transactions.