Cha & Kwon Law Offices advised a company operating a business model combining an IoT-based beauty device and a mobile app service on whether restricting app-based functions is permissible when consumers discontinue installment payments. The service structure involved device-based skin measurement, in-app analysis and customized recommendations, as well as a data utilization and reward mechanism, raising legal considerations in a payment-dependent service model.

Cha & Kwon Law Offices analyzed the legal nature of the arrangement based on the substance of the service and its actual operational structure, rather than relying solely on a formal product sale characterization. The review focused on the scope of functions subject to restriction, the likelihood that certain app features could be viewed as essential to the device’s core utility, and potential risks under Korean consumer protection laws and unfair terms regulations.

Based on this assessment, practical guidance was provided on aligning payment obligations with service availability through contract and terms design, including the need to clearly define the scope and conditions of any service limitations. The advisory also addressed operational considerations relating to personal data handling and data reward mechanisms to support regulatory compliance and reduce consumer dispute exposure.