Plywood Pretending to Be Solid Wood... Ceragem Faces FTC Sanctions for 'False Advertising'

Seragem, a latecomer in the massage chair market, has been sanctioned by the Fair Trade Commission for false advertising.

On the 24th, the Fair Trade Commission announced that it decided to impose a corrective order along with a fine of 128 million KRW on Seragem for violating the "Act on Fair Labeling and Advertising."

According to the Fair Trade Commission's investigation, from March 2022 to March last year, Seragem advertised its massage chair product "Seragem Pause Decoer" (hereinafter Decoer) on TV, its website, and home shopping channels, claiming that the wooden parts of the product were made of solid wood, although they were actually plywood with a veneer pattern.

Seragem manufactured the Decoer product by bonding California black walnut veneer to plywood, but used phrases such as "depth of solid wood," "value of solid wood," and "premium solid wood black walnut used," advertising it as if it were made of high-quality solid wood.

Consumers who saw these advertisements would find it difficult to distinguish whether the wooden parts of the product were solid wood, so they had no choice but to rely on the information provided by the business. Furthermore, the small disclaimer text in some ads made it hard to recognize that the material was plywood, leading to the risk of misunderstanding that the product was made of solid wood.

Some advertisements included a disclaimer stating "layered black walnut material using natural solid wood," but the term "layered," which is rarely used in massage chairs, made it difficult for consumers to realize it was plywood. The emphasis on "natural solid wood" and "black walnut" further increased the possibility of consumer misunderstanding, according to the Fair Trade Commission.

In particular, as a latecomer in the massage chair market, Seragem emphasized materials and design as key differentiating factors from competitors’ products and focused its advertising on these aspects. Advertising the Decoer product as if it used solid wood interferes with consumers’ rational purchasing decisions and may undermine fair trade order.

The Fair Trade Commission judged that this advertising act constitutes false and exaggerated labeling and advertising. The Commission evaluated, "This action is significant in that it strictly penalized unfair advertising practices in a market with high information asymmetry, where consumer interest in home healthcare appliances such as massage chairs is increasing."