SNS 'Dwitgwanggo' Ban from September 1
Fair Trade Commission Releases Guide with Examples
Three out of Ten Influencers Don't Disclose Compensation
Fair Trade Commission "Revising Review to Regulate These Issues"
[Asia Economy Reporter Moon Chaeseok] Starting from the 1st of next month, the revised guidelines on the review of recommendations and endorsements in advertising by the Korea Fair Trade Commission (KFTC) will be enforced. 'Undisclosed advertisements' by social media (SNS) influencers on platforms such as YouTube and Instagram will be prohibited.
On the 31st, the KFTC released a detailed guidebook on its website explaining the contents of the revision through examples and Q&A, one day before the enforcement of the revision.
Content posted before the revision may be illegal if not corrected
The revision applies to content created before the enforcement date. If economic interests were not disclosed in content created before the enforcement date, it may be classified as unfair advertising, so it should be corrected even if belatedly.
If only ambiguous expressions such as 'experience group' or 'in collaboration with ~ company' were used, the economic interests must be clearly disclosed again.
When products are received for free, phrases like 'product sponsorship' must be included, and when advertising fees are received, terms like 'advertisement' should be added.
Even if products or services were not received for free, if a discount was given as compensation for content creation, economic interests must be disclosed.
The KFTC explained that when determining administrative sanctions such as fines for illegal SNS advertising, voluntary correction may be taken into consideration.
On Instagram posts, disclosure can be made in the first line of the text, the first hashtag, or within the photo. On YouTube videos, it should be displayed in the title or within the video.
Using the 'Includes paid promotion' banner on YouTube is allowed, but since this feature only appears at the beginning of the video, it must also be separately displayed in the middle and at the end of the video.
'Naedonnaesan' reviews must disclose interests if advertising contracts are made afterward
If an influencer posts a 'Naedonnaesan' (purchased with my own money) review and the advertiser later views it and pays compensation to enter into an advertising contract, the original review content must be revised to disclose that economic interests have arisen.
However, if the advertiser posts the review content on their own account or uses it as official advertising material so that consumers can clearly recognize it as an advertisement, disclosure of economic interests is not required.
When a celebrity acting as a brand model promotes the brand’s products through their personal SNS account, they must disclose that it is an advertisement and that they are an advertising model, even if no compensation is given.
If consumers can sufficiently recognize that content such as advertising photos, CF videos, or behind-the-scenes footage of advertising shoots is an advertisement, disclosure may be omitted.
If a broadcasting company edits a TV program containing product placement and uploads it to SNS, economic interests must be disclosed. However, if the edited video does not include product placement, disclosure is not necessary.
When ordinary consumers purchase products from shopping malls and write reviews to receive reward points, disclosure of economic interests is not required.
When posting SNS content about restaurants, participating in events where drinks or other items are given, or writing reviews on delivery apps, disclosure of economic interests is also not required.
Three out of ten influencers do not disclose economic compensation... "This issue led to the revision"
There have been many cases where undisclosed advertisements were openly conducted without properly disclosing economic compensation. This led to criticism that undisclosed advertisements were rampant in regulatory blind spots.
From the consumer’s perspective, they unknowingly trusted YouTubers and purchased products without realizing they were undisclosed advertisements. This has been criticized as tantamount to 'fraudulent behavior' by influencers.
According to a survey conducted by the Korea Consumer Agency in October last year, only 29.9% of advertising posts on top domestic influencer accounts disclosed economic compensation.
The KFTC explained that the revision was prepared to clearly disclose economic compensation and reduce the possibility of undisclosed advertisements.
Lee Taehwi, head of the Consumer Safety Information Division at the KFTC, said, "We revised the review guidelines because we judged that problems related to 'undisclosed advertisements' could arise due to influencers not properly disclosing economic compensation."
KFTC requests SNS and online platforms to establish related systems
Since the revision will be enforced from the 1st of next month, the KFTC plans to monitor compliance and conduct continuous publicity.
The KFTC is preparing a voluntary compliance campaign and voluntary agreements together with the Influencer Industry Association, MCN Association, and others.
They will request SNS and online platforms such as YouTube, Instagram, and various portals to establish systems that disclose the interests between influencers and advertisers.
Lee said, "With this guidebook that explains in detail how to disclose economic interests in recommendation and endorsement advertisements, the industry will voluntarily comply with the law and consumers will receive accurate information," adding, "It is expected to prevent unfair advertising."
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