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South Korea’s Fair Trade Commission has launched investigations into subscription practices by popular streaming services like Spotify and Netflix over suspicions that they may violate the country’s consumer protection laws on the refund of money for services that have been canceled.
If a user cancels their subscription in the middle of a billing period, terminating their account, the commission says it would be proper and fair for customers to receive refunds on a prorated basis for any time not used but paid for in full. Many of the streaming services say this would let many subscribers “sign up just long enough to take advantage of watching that season’s hot new shows or listen to albums people are talking about – and then cancel and receive most of their money back.”.
While video services carry a greater risk of that short-termism, Spotify has also ended up being one of the five companies it’s being investigated alongside. And it’s not as if this is South Korea’s first attempt to poke into the music streaming market; back in January, YouTube Music started receiving inquiries about its bundled memberships. The watchdog is still monitoring the operations of MelOn, which is owned by Kakao, after the former acquired a majority stake in the entertainment agency SM.
This watchdog obviously wants to protect consumers in line with the expanding virtual economy. Global major platforms like Spotify and Netflix shall have to change the local policies whilst keeping watch on the subscription small prints so as not to incur any sanctions.
