South Korea to crack down on blogshop hosts

South Korea is drafting a bill to make Internet portal sites liable for damages by consumers on the blogshops and online retail sites hosted by them, amid rising complaints and loss of taxes.

The country's Fair Trade Commission (FTC) is preparing to propose and amendment to the e-commerce laws to make portal owners liable for their vendors' activities, according to a JoongAng Daily report over the weekend. Online shopping sites are subject to certain consumer laws but portal operators, like Naver and Daum, are currently exempted.

Transactions on blogshops are typically not regulated, and hence not taxed. As receipts are usually not issued, this also makes refunds or exchanges relatively more difficult and also raises the risk of fraud.

"As the reputation and influence of the portal sites play big parts when consumers purchase online, the purpose of the amendment is to put certain responsibilities on these portals where transactions take place," said an academic who participated in the discussion for the amendment, according to the newsdaily.
The number of consumer complaints filed to the FTC increased from 615 in 2011 to 720 last year, noted the report. Customers largely complained about being unable to contact merchants after remitting payments, or merchants refusing to accept returns of defective items.

Last month, Indonesia announced plans to roll out new e-commerce regulations in order to minimize fraud and build people's trust in online shopping, such as with the requirement to use Indonesian domain names. In February, Malaysia said it would would regulate online busineses from July 2013 to raise the confidence of consumers, amid a "worrying" increase in electronic transaction fraud cases.