Seoul, South Korea, where Spotify and others are reportedly grappling with regulatory scrutiny over their cancellation and refund policies. Photo Credit: Tuan P.
South Korean regulators are reportedly cracking down on Spotify and other streaming platforms over their cancellation and refund policies.
The Korea Economic Daily reported on this latest regulatory initiative from South Korea’s Fair Trade Commission (FTC), which has zeroed in on K-pop agencies’ sales practices, YouTube Music’s bundled offerings, and more throughout the past year or so.
March saw reports point to a wider FTC campaign to rein in streaming platforms with the Platform Competition Promotion Act. While that controversial measure has seemingly been shelved following ample business-sector pushback, the underlying streaming-reform objective is evidently alive and well.
Per the mentioned outlet, South Korea’s FTC has forwarded “examination reports” to music streaming services including Spotify and NHN’s Bugs! as well as video counterparts like Netflix. And according to the summary of these reports, the platforms have allegedly failed to allow subscribers to easily cancel mid-billing cycle or neglected to inform them of the option.
Additionally, as the government agency sees it, domestic streaming platforms are required to provide partial refunds based on how long one has remaining on the involved plan at the time of cancellation.
Predictably, the companies themselves don’t feel the same way and, in short, are reportedly arguing that the appropriate law doesn’t apply to them.
Among other things, this law, called the Act on Door-to-Door Sales, reportedly obligates establishments like gyms (and different service providers with models revolving around “recurring transactions”) to cough up partial refunds for mid-cycle subscription cancellations. Internet giant Naver is reportedly facing similar scrutiny.
But once again in the interest of brevity, the streaming services are maintaining that the law would make it easy for binging-minded superfans to game the system by signing up for a day and then bailing on the rest of the subscription period.
A relatively late arrival to South Korea’s music space, Spotify only offers paid options in the nation, referring to the standard Individual plan (₩10,900/$8.23 per month) as well as a “Basic” alternative (₩7,900/$5.96 per month) that includes all the former package’s features save offline listening.
In other South Korean streaming news, KakaoBank recently purchased about 15% of fintech startup Naivy. The developer behind PLAM, which pays small amounts to users for listening to certain songs, Naivy has, in turn, integrated its products into the Kakao-owned online bank.
Consequently, KakaoBank now enables users to access PLAM directly through a tab in its main banking app.
