Airbnb could face referral to prosecutors for not complying with KFTC order

2 May 2017 11:35am

24 April 2017. By Ron Lubosco.

The Korea Fair Trade Commission, or KFTC, may refer online marketplace Airbnb to prosecutors if the company doesn't implement the regulator's corrective orders and revise its refund policy by a June deadline, MLex has learned.

The KFTC determined that the company's policy of offering refunds of only 50 percent to consumers who cancel up to 30 days prior to their arrival and its policy of offering no refunds for cancellations within seven days were harmful to consumers. The KFTC ordered the company to offer full refunds to consumers who cancel their reservations at least 30 days before their scheduled arrival and to offer 50 percent refunds to consumers who cancel within seven days prior to their arrival.

The regulator also ordered that the company's service fee of 6 percent to 12 percent be completely refunded when a consumer cancels their reservations.

Airbnb initially filed an appeal against the regulator's decision, but then officially withdrew its objection on March 14 and agreed to follow the order.

The deadline for complying with the KFTC's ruling is 60 days after the order was issued.

The KFTC can issue up to two warnings to remind a company to make the corrections required by the regulator.

Airbnb has already received its first warning to comply with the order and is likely to receive a second warning at the end of this month or in May, MLex has learned.

Despite the first warning, the company has yet to comply with the order, it is understood.

MLex was told that the regulator is treating the Airbnb case very seriously and will likely issue an immediate referral to prosecutors if the company fails to comply by the June 2 deadline.

It is understood that the KFTC is keeping a close eye on the company and continues to check on its progress in complying with the order.

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