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| A front page of YouTube's paid service YouTube Premium |
By Baek Byung-yeul
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| Google Korea CEO Jonh Lee |
The Korea Communications Commission (KCC), which supervises the country's media policy, said it has been investigating YouTube since January 2019, looking into whether Google's streaming service gained active consent from users when converting those trial users into paying customers.
The regulator concluded that YouTube didn't properly notify its users that the free trial service will be converted to a paid service, which could mislead a large number of users.
"From December 2016 to December 2018, more than 45 percent of users among 2.54 million people, who used the one-month free trial service of YouTube Premium, were automatically converted to subscribers of the paid service and about 98,000 people demanded a refund. So it was confirmed that a large number of users were affected by Google's violation of the law," the KCC said.
YouTube has been operating its ad-free subscription service called YouTube Premium since 2015. In Korea, the service is priced at 8,690 won ($7.5) a month. YouTube offers users a one-month free trial.
After paying the monthly subscription fee, users can enjoy YouTube content without advertisements. YouTube Premium service users are also able to download content to enjoy offline and play videos in the background while using another app on their phone.
"The KCC imposed a 435 million won fine on Google as the company prohibited its users to cancel the subscription by not giving proper notification and didn't issue refunds for the period the users didn't use (the service). We also issued a 432 million won fine for not properly notifying users of the monthly fee, the cooling-off period and the terms and conditions for refunds," the regulator said.
YouTube informed its users that the free-trial service will end, three days before its expiry via email but didn't state a specific amount of payment the users would have to pay or how to convert the free service to the paid one, the regulator said.
The KCC also found that YouTube didn't notify its users that they would need to pay an additional tax of 790 won to use YouTube Premium. In Korea, the prices shown to buyers must include all taxes.
The government has been scrutinizing overseas streaming service providers which have been increasingly taking control of the country's over-the-top (OTT) content market.
On Jan. 15, the Fair Trade Commission (FTC) ordered Netflix, the world's leading video streaming service provider, to amend its one-sided terms and conditions.
The FTC deemed six clauses in Netflix's subscription contracts as unfair and ordered the video streaming provider to obtain an agreement from its subscribers when the users change their service plans. The subscription-based video streaming service made its foray into the Korean market in 2016 and is estimated to have more than 2 million paying subscribers here.
