[Exclusive] Sandbox, agency of Doti who clarified "Please don't distort the truth," apologizes for 'undisclosed advertising'

YouTuber Doti (real name Na Hee-seon), who was embroiled in a controversy over so-called 'backdoor advertising' for receiving sponsorships and advertising without disclosure, apologized on behalf of Sandbox Network, where he serves as CEO, saying, "We are deeply sorry to our viewers." Doti speaking about his appointment as an ambassador in front of the Green Umbrella Children's Foundation in Jung-gu, Seoul last year. Photo by Yonhap News

[Asia Economy Intern Reporter Kim Seul-gi] YouTuber Doti (real name Na Hee-seon), who was embroiled in a controversy over so-called "undisclosed advertising" by receiving sponsorships and advertising without disclosure, has denied the allegations as "clear falsehoods," and Sandbox Network, where Doti serves as CEO, apologized, saying, "We are deeply sorry to our viewers."

On the 7th, Sandbox stated through its official YouTube channel, "We would like to apologize and inform viewers about our future measures regarding the recent issue of YouTubers' 'undisclosed paid advertisements' videos," adding, "First, we sincerely apologize to the viewers who were hurt by this issue."

Sandbox explained, "Before June, when the Fair Trade Commission (FTC) announced the revised 'Guidelines for Display and Advertising Regarding Recommendations and Endorsements,' there were no specific instructions in the existing FTC guidelines about the placement or method of paid advertisement disclosures in YouTubers' videos. We have been notifying paid advertisements through our own guidelines using 'voice or subtitles within the video,' the 'description box,' or 'pinned comments'."

They continued, "Furthermore, regarding similar issues previously pointed out by the FTC, we inquired with the FTC about appropriate paid advertisement disclosure measures at that time and confirmed that notifying the advertisement through the 'description box' was acceptable. However, we acknowledge and apologize that this internal guideline was insufficient to provide adequate advertisement disclosure to viewers."

Sandbox added, "To ensure this issue does not end as a one-time problem, we will internally save and store videos with undisclosed paid advertisements separately and continuously inform both new and existing employees. We will also launch an internal campaign to regularly remind YouTubers of this issue."

Earlier, YouTuber 'ChamPD,' who runs the YouTube channel 'AejugaTV,' exposed evidence that Doti and Sandbox conducted undisclosed advertising. In response, Doti emphasized, "This company is like my life. Please do not distort and mislead my true intentions with speculation."

At that time, Doti explained, "I make many mistakes running a business without a role model. But I cannot understand why my sincerity and the company's sincerity are being distorted and subjected to such harsh criticism. This is a clear falsehood."

Below is the full apology statement from Sandbox Network

Hello, this is Sandbox Network.

We would like to apologize and inform viewers about our future measures regarding the recent issue of YouTubers' 'undisclosed paid advertisement videos.' First, we sincerely apologize to the viewers who were hurt by this issue.

On June 23, 2020, the Fair Trade Commission announced the revised 'Guidelines for Display and Advertising Regarding Recommendations and Endorsements' (hereinafter referred to as FTC guidelines), which will be applied from September 1. Before the announcement of the revision in June, the existing FTC guidelines did not specify the placement or method of paid advertisement disclosures in YouTubers' videos. Sandbox has been notifying paid advertisements through its own guidelines using 'voice or subtitles within the video,' the 'description box,' or 'pinned comments.'

Furthermore, regarding similar issues previously pointed out by the FTC, we inquired with the FTC about appropriate paid advertisement disclosure measures at that time and confirmed that notifying the advertisement through the 'description box' was acceptable.

However, we acknowledge and apologize that this internal guideline was insufficient to provide adequate advertisement disclosure to viewers. In addition, we conducted a full investigation of paid advertisement videos produced by Sandbox and affiliated YouTubers, and during this process, we confirmed that some videos lacked paid advertisement disclosure statements.

This is clearly a problem caused by Sandbox's negligence in management, and Sandbox deeply regrets this responsibility. Furthermore, due to this oversight, correct information was not delivered to viewers, causing great discomfort and disappointment. We sincerely apologize for this.

To prevent such problems and ensure they do not recur, Sandbox intends to take the following measures.

We will have Sandbox employees and YouTubers receive regular education on advertising laws and obligations by commissioning professional legal institutions.

To ensure this issue does not end as a one-time problem, we will internally save and store videos with undisclosed paid advertisements separately and continuously inform both new and existing employees. We will also launch an internal campaign to regularly remind YouTubers of this issue.

We will strictly comply with the revised FTC guidelines effective from September 1, and additionally, we will request a regulatory review of our currently implemented internal advertising guideline through the Fair Trade Commission to prevent similar issues in the future.

We apologize once again to the many viewers who felt discomfort and disappointment due to videos with undisclosed paid advertisements. Furthermore, we promise to provide the most accurate paid advertisement information so that viewers can watch videos with confidence in the future.

Lastly, YouTubers who disclosed paid advertisements through the video description box, pinned comments, etc., according to Sandbox's guidelines, are also receiving false and speculative criticism and malicious comments. We earnestly ask that you stop criticizing and posting malicious comments about YouTubers who complied with Sandbox's existing guidelines. We will humbly accept and reflect on any stern advice and reprimands directed solely at Sandbox, which bears full responsibility for this matter.

Thank you for reading this lengthy statement.

Sincerely, Sandbox Network