Airbnb Legal Fight

[Anchor Lead]

The legal fight between the hospitality service Airbnb and the South Korean Fair Trade Commission has been handed over to prosecutors. The Fair Trade Commission says it will indict Airbnb for its failure to change its terms and conditions.

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Last year this woman made an overseas lodging reservation on Airbnb, and cancelled it three months in advance. However, The cancellation fee was 50 percent of the rent.

[Soundbite] Victim of Airbnb Services(Voice modified) : "I cancelled my reservation, because I heard that it was not a safe place to travel. It was so unfair."

As damages continued to grow, the Fair Trade Commission ordered Airbnb in November last year to change its terms and conditions regarding 50-percent cancellation and non-refundable service fees. In response, Airbnb agreed to provide 100-percent refunds on reservations cancelled 30 days in advance and 50-percent on those that are cancelled less than 30 days prior to the date of arrival. However, the modified regulations are only shown to Korean users, while users from all other countries are shown the previous terms and conditions. The Fair Trade Commission has concluded that Korean users may suffer more damages, such as belated refusals from the owners of lodging facilities.

[Soundbite] Bae Hyun-jung(Fair Trade Commission) : "We are concerned that Korean customers may be turned down by lodging providers because they have to pay them more in refunds."

The regulations regarding service fee refunds were also found to have certain preconditions. The Fair Trade Commission said it's the first instance of indicting an overseas business and its owner for contract terms. Airbnb has responded by hiring an attorney from a large law firm to handle the case. Airbnb provides services in more than 190 countries worldwide. Recently the Ministry of Foreign Affairs warned Korean travelers against various crimes committed at overseas lodging facilities, such as sex crimes, hidden cameras and racial discrimination.