The controversy over so-called 'hidden advertisements,' where YouTubers broadcast without disclosing sponsorships and advertising fees, is spreading. [Image source=Yonhap News]
[Asia Economy Intern Reporter Min Jun-young] Amid suspicions that some YouTubers received sponsorships or advertising fees from certain companies without disclosing the advertisements, Secretary General Jeong Ji-yeon of the Korea Consumer Federation criticized, "Undisclosed advertisements are acts that deceive consumers and undermine a fair trade environment, and both the MCN companies affiliated with YouTube and the advertisers bear responsibility."
In an interview with CBS Radio's 'Kim Hyun-jung's News Show' on the 10th, Secretary General Jeong said, "This form of undisclosed advertising is just a change in platform to YouTube, but similar controversies existed in the past when marketing through blogs or Facebook was active."
He added, "There had been suspicions about undisclosed advertisements, but it was difficult to prove. In April, controversy began when reports revealed that stylist Han Hye-yeon and singer Kang Min-kyung claimed 'I bought this with my own money' and recommended products, but the broadcasts were actually sponsored by advertising fees."
Regarding the background of undisclosed advertisements, Secretary General Jeong explained, "The moment it is revealed as an advertisement, the advertising effect drops sharply. From the consumer's perspective, if it is not a commercial advertisement, they believe that their favorite YouTuber genuinely used and recommends the product, so hiding the fact as much as possible and naturally exposing the product is effective, which is why undisclosed advertisements are demanded."
He continued, "From the YouTuber's standpoint, if it appears commercial, a negative image may arise, causing subscribers to decrease, so ultimately, undisclosed advertisements result from the interactive effect between advertisers and YouTubers."
He also stated, "(YouTube headquarters) have no way to detect undisclosed advertisements and face significant limitations in imposing sanctions," adding, "Because of this, the Fair Trade Commission announced that it will change its review guidelines and strengthen crackdowns starting next month."
He explained, "The guidelines specify that when uploading videos or live streaming on YouTube and posting product reviews in exchange for monetary compensation, it must be clearly indicated as an advertisement," and "Advertisers must repeatedly disclose from start to finish that it is paid advertising so that consumers recognize it as such."
However, pointing out the limitations of enforcement, he said, "It is uncertain whether inspecting and cracking down on broadcasts by countless YouTubers will be effective. Undisclosed advertisements will continue to evolve, so if monetary compensation is restricted, there will be many loopholes to escape through," adding, "Therefore, it is necessary to enforce laws with principles such as imposing strong penalties on illegal acts against consumers."
He further stated, "I believe that if the punishment for being caught is stronger than the profits gained through undisclosed advertisements, illegal acts will be eradicated. However, this cannot be achieved by cracking down on YouTubers alone; the responsibility of the platform must also be strengthened," and added, "Responsibility on YouTube means holding the YouTube platform itself accountable so that systems like data relief monitoring can function properly."
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