The South Korean Fair Trade Commission (FTC) has initiated regulatory action against AliExpress, the popular Chinese online shopping platform, over allegations of false advertising. (Image courtesy of Yonhap)
SEOUL, Oct. 2 (Korea Bizwire) – The South Korean Fair Trade Commission (FTC) has initiated regulatory action against AliExpress, the popular Chinese online shopping platform, over allegations of false advertising.
On September 30, the FTC sent a report detailing potential sanctions to an AliExpress affiliate responsible for product sales. The commission determined that the company’s advertisements, which claimed discounts of up to 90% on certain items including cosmetics, were misleading and exaggerated.
According to sources familiar with the matter, the primary issue lies in the calculation of discount rates. South Korean regulations stipulate that such rates must be based on prices at which products have been sold for at least 20 days, a criterion that AliExpress allegedly failed to meet.
Under South Korea’s Fair Labeling and Advertising Act, companies can face fines for false or exaggerated advertisements that may disrupt fair trade practices. The FTC is also investigating Temu, another Chinese e-commerce platform, on similar grounds.
The regulatory action comes amid growing popularity of Chinese online shopping services in South Korea, accompanied by concerns about their compliance with local laws.
On September 2, civic groups including the People’s Solidarity for Participatory Democracy and the Korea National Council of Consumer Organizations filed a petition with the FTC, accusing both AliExpress and Temu of excessive personal data collection, evasion of responsibility, and imposing unfair terms of service on users.
A consumer complaint center operated by these organizations from May to July revealed that both platforms were compelling users to accept terms of service that allowed collection of excessive personal information. This included location data, IP addresses, and device information beyond what is necessary for product delivery.
In Temu’s case, the terms of service reportedly include clauses that shield the company from liability and require any lawsuits to be filed in Singapore, making it difficult for South Korean users to seek legal recourse.
These concerns follow a July ruling by South Korea’s Personal Information Protection Commission, which fined AliExpress 1.9 billion won for failing to properly notify Korean users about the transfer of their personal information to overseas sellers.
Ashley Song (ashley@koreabizwire.com)
