South Korea regulator may sanction Meta over marketplace, say media reports

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SEOUL (Reuters) — South Korea's antitrust agency will consider imposing sanctions on Meta Platforms (NASDAQ:META) for allegedly failing to protect some users of online marketplaces operated by Facebook and Instagram against fraudulent transactions, news reports said on Friday.

The Korea Fair Trade Commission (FTC) had investigated possible violations of the country's e-commerce law and had sent an examination report to Meta late last year, Yonhap news and the Dong-a Ilbo newspaper reported, citing unnamed sources.

The report is a step before the agency's commissioners meet to consider the findings and formally decide on measures.

The agency alleged Meta has failed to implement adequate measures to protect and provide a remedy to users of Facebook and Instagram marketplaces when disputes arose over sales transactions, as required for e-commerce outlets, Yonhap said.

The FTC declined to confirm the report citing its policy of not commenting on an ongoing investigation.

Meta did not immediately respond to a request for comment.

While Facebook and Instagram are social media platforms and are not registered as e-commerce businesses, the marketplaces they operate effectively require them to comply with the law, Yonhap said.

The news reports came after a South Korean consumer protection watchdog said it was reviewing the practices of major overseas shopping platforms, including Alibaba (NYSE:BABA)'s AliExpress and Temu.