South Korea to penalize lodging businesses for price gouging from first offense

Lodging businesses in South Korea will face immediate business suspension penalties, even for a first offense, if they fail to post room rates or charge more than the displayed price. The Ministry of Health and Welfare announced that the revised enforcement decree of the Public Health Control Act, effective July 14, significantly strengthens penalties for exploitative pricing.

Under the new rules, businesses caught overcharging or not displaying prices will receive a five-day business suspension for the first violation. Repeat offenses will lead to progressively harsher penalties: a 10-day suspension for a second offense, a 20-day suspension for a third, and ultimately, a business closure order for a fourth violation. Previously, the first offense typically resulted in only a warning or a corrective order, which proved insufficient in deterring such practices.

The updated regulations also extend to online operations, requiring lodging businesses to post their room rates on their websites or booking platforms. Charging higher prices than those advertised online will incur the same penalty structure. However, the ministry clarified that businesses would be exempt from penalties if the violation was due to reasons beyond their control, such as system errors.

This initiative is a follow-up to the government's comprehensive plan announced in February to eradicate exploitative pricing. The Ministry of Health and Welfare plans to inform local governments and lodging businesses about the changes and will strictly address practices that undermine consumer trust, such as price gouging and failure to post rates.