- Corrective orders and fines imposed on Marketit and Flow Marketing for false and deceptive advertisements -
The Korea Fair Trade Commission (KFTC) has decided to issue corrective orders, public disclosure orders, and impose fines totaling 1 million won on two advertising agencies (Marketit Co., Ltd. and Flow Marketing) for recruiting influencers to post false or misleading reviews on social networking services (SNS).
The types of unfair advertising practices related to review advertisements addressed in this action include:
- Paying influencers to post advertisements without clearly disclosing their financial relationships, thereby concealing or omitting economic interests.
- Advertising products or services as if they had been personally experienced or used by the influencers, when in fact they had not.
- Marketit Co., Ltd. recruited influencers through its website and mobile application (Influencer Car) from October 15, 2022, to October 3, 2023. These influencers posted a total of 3,944 advertisements for 267 advertisers’ products on Instagram, receiving economic compensation without clearly disclosing the financial relationships.
- Flow Marketing recruited influencers through its website from January 4, 2021, to December 31, 2023. These influencers posted a total of 2,653 advertisements for 88 advertisers’ products on personal blogs, using pre-written content provided by Flow Marketing. The influencers had not actually experienced or used the advertised products or services, yet the advertisements suggested otherwise.
The KFTC determined that these advertising practices constitute unfair advertising (false, exaggerated, or deceptive advertising).
These advertisements, which involved recommending or endorsing products through influencers, should have clearly disclosed any economic relationships. Concealing or omitting such information is deemed deceptive. Additionally, advertisements that claim experiential facts without actual experience are considered false and exaggerated.
Ordinary consumers with average attentiveness might mistakenly believe these review advertisements are genuine testimonials or voluntarily written without any economic incentives. This could mislead consumers, hinder their rational purchasing decisions, and undermine fair competition.
Previously, false and deceptive review advertisements online were generally led by advertisers, resulting in sanctions primarily against advertisers or jointly against both advertisers and advertising agencies.
The significance of this action lies in the fact that the advertising agencies, which systematically recruited numerous advertisers and influencers to produce false and deceptive reviews, are being sanctioned independently.
The KFTC plans to continue monitoring unfair advertising practices in the SNS review market.