[Asia Economy Reporter Hana Na] The Fair Trade Commission (FTC) will start penalizing 'undisclosed advertisements'?paid ads that are not properly disclosed on platforms like YouTube?from next year.
Until now, only advertisers were punished for violating the Act on Labeling and Advertising, but from next year, YouTubers, influencers, and celebrities will also face penalties and sanctions.
On the 25th, the FTC announced that the "Guidelines on Labeling and Advertising for Recommendations and Endorsements," which prohibit undisclosed advertisements on social network services (SNS), will undergo a grace period until the end of this year and will be fully enforced starting January next year.
Posting content disguised as "product reviews" without informing viewers that it is a paid advertisement is considered "unfair advertising," and "business operators" must pay fines of up to 2% of related sales or income, or up to 500 million KRW.
According to the FTC, "business operators" here include advertisers as well as YouTubers, influencers, and celebrities. In other words, those who engage in promoting products on SNS in exchange for economic benefits as a profession, and those who gain significant profits from related content, are also subject to these rules.
The FTC will focus on guidance rather than immediate punishment until the end of this year.
During the guidance period, a consumer monitoring team will be formed to request voluntary correction of undisclosed advertisements, encouraging the industry to autonomously comply with the guidelines.
The FTC also plans to form a consultative body with the industry to encourage advertisers and prominent YouTubers to follow the guidelines.
On the 23rd, FTC Chairman Seongwook Cho attended a symposium on "Consumer Issues on SNS Platforms" and stated, "We plan to support the industry's voluntary compliance activities and strengthen monitoring of unfair advertising on SNS."
However, even after the guidance period ends next year, YouTubers or influencers who engage in undisclosed advertising may be punished for unfair advertising.
Additionally, if unfair advertisements such as undisclosed ads are conducted through SNS, the responsibility of related online platform operators is expected to increase.
Although still in the early stages, discussions are emerging overseas to strengthen the responsibility of platform operators regarding undisclosed advertisements.
In February, Rohit Chopra, a commissioner of the U.S. Federal Trade Commission (FTC), issued a statement outlining requirements for online platform operators and compliance obligations for companies and celebrities, initiating a public comment process.
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