If Internet shopping malls charge suppliers more than 50 percent of their sales promotion costs, they can be sanctioned for violating a large-scale trade law.

The Fair Trade Commission (FTC) announced that it would draw up a bill to review the illegalities of large Internet shopping mall operators for transferring the cost of sales promotion under the Mass Distribution Business Act and announce administrative predictions until January 7.

FTC presented detailed guidelines to increase predictability of sharing sales promotion cost and prevent damage to suppliers. The guidelines will be applied to Internet shopping malls (including social commerce), which are operated by department stores, large discount stores, and TV home shopping malls with annual sales of more than 100 billion won.토토추천


The large-scale distribution business law prohibits large-scale distributors from paying suppliers the costs of promoting sales without prior agreements. In order to comply with the pre-contracting obligation, the guidelines required the supplier to issue a written agreement with both parties' signatures and a written notice before the "fast day" comparing the start date of the sales promotion event and the first time the supplier was charged for promoting sales.

It also stated that large Internet shopping malls do not comply with pre-agreements with suppliers, or that actual sales promotion costs of suppliers exceed the legal limit (50 percent).

The Fair Trade Commission expected that the new guidelines will help large Internet shopping mall operators prevent possible violations of laws related to promotion events in advance. Small and medium suppliers are predicting that they will be able to calculate appropriate amount of promotion cost on their own and increase profitability by easing burden of excessive promotion cost.

"We will continue to supplement the bill based on the results after collecting opinions from stakeholders during the period of the announcement and implement the guidelines starting from February 2019.

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