- Fines, penalties, and corrective orders imposed for deceptive advertising of promotional conditions, failure to display identification information, and unregistered telemarketing business -
The Korea Fair Trade Commission (KFTC, Chairperson Han Ki-Jeong) has decided to impose a fine of KRW 357 million, an administrative penalty of KRW 1 million, and corrective orders on Elementary Innovation Private Limited (Temu) for violating the Act on Fair Labeling and Advertising (Fair Advertising Act) and the Act on Consumer Protection in Electronic Commerce, etc. (E-commerce Act).
Violations Related to the Fair Advertising Act
① Misleading Discount Coupon Advertisements: From August 25, 2023, to March 20, 2024, Temu falsely advertised on its website (www.temu.com) that discount coupons were only available if users installed the app within a limited time, displaying a countdown timer ("○○: ○○: ○○.○") even though coupons were provided regardless of timely app installation.
② 999 Won Advertisements for Nintendo Switch, etc.: From May 9, 2024, to July 20, 2024, Temu conducted a promotion via YouTube offering a Nintendo Switch and other products for 999 won to the first person. However, it deceptively advertised as if multiple people would receive the promotional items or exaggerated the chances of winning with phrases like "Congratulations! You hit the jackpot," or implied that purchases at 999 won were guaranteed.
③ Deceptive Advertising of Free Credits and Products: From September 21, 2023, until the deliberation date of May 2, 2025, Temu ran a promotion via its mobile app where users could receive credits and products by having acquaintances install the Temu app. However, it made the conditions for receiving these rewards difficult for consumers to understand, implying they were freely provided.
Specifically, consumers had to click on a small "Rules" section in the top right corner of the screen to find details such as:
- The need to refer acquaintances to install the Temu app.
- The number of valid referrals required to receive rewards.
- The decrease in coins and energy received as the number of referrals increased.
The KFTC determined that these advertisements unduly influenced consumers' purchasing decisions and platform choices, constituting unfair advertising practices. Thus, it decided to impose corrective orders (including public disclosure orders) and a fine of KRW 357 million.
Measures for Fair Advertising Act Violations:
- ① Discount Coupon Advertisement: Prohibition order
- ② 999 Won Nintendo Switch Advertisement: Prohibition order
- ③ Credit, Free Product Advertisement: Prohibition order, cease and desist order, public disclosure order (6 days), fine of KRW 357 million
Violations Related to the E-commerce Act
① Failure to Display Operator Identification Information: According to Article 10, Paragraph 1 of the E-commerce Act, online mall operators must display their identification information and terms of use prominently on the initial screen or a linked screen of their online mall. However, Temu failed to display this information on its website (www.temu.com) and mobile app.
② Failure to Register as a Telemarketing Business: According to Article 2, Paragraph 3 of the E-commerce Act, an entity that performs telemarketing services under an agreement with a telemarketing business operator must register as a telemarketing business operator under Article 12, Paragraph 1 of the same act. Temu, by providing product sales information and accepting orders in agreement with its sellers, effectively acted as a telemarketing business operator (a telemarketing broker that is a telemarketing business operator) but failed to fulfill its registration obligation.
③ Failure to Disclose Broker Status: According to Article 20, Paragraph 1 of the E-commerce Act, telemarketing brokers must clearly inform consumers on the initial screen of their online mall that they are not the actual party to the telemarketing transaction, to prevent consumers from mistaking the broker for the seller. However, Temu, while acting as a telemarketing broker through its online mall, failed to disclose this fact on its initial screen.
It's worth noting that Temu fulfilled its telemarketing business registration obligation for violation ② in March 2025 and voluntarily rectified violations ① and ③ in April 2025.
Therefore, the KFTC decided to impose a prohibition order and an administrative penalty of KRW 1 million on Temu for violating the E-commerce Act by failing to fulfill its obligations as:
- ① An online mall operator to display information.
- ② A telemarketing business operator to register.
- ③ A telemarketing broker to notify consumers.
Measures for E-commerce Act Violations:
- ① Failure to Display Operator Information: Prohibition order, administrative penalty of KRW 1 million
- ② Failure to Register as Telemarketing Business: Prohibition order
- ③ Failure to Disclose Broker Status: Prohibition order
The KFTC's current action is significant as it identifies and corrects unfair advertising practices and E-commerce Act violations by an overseas e-commerce platform. This measure is expected to help prevent consumer harm by ensuring that foreign companies entering the domestic market comply with the obligations under the Fair Advertising Act and the E-commerce Act.