Presentation of Standards Requiring Key Restrictions to Be Clearly Stated Near the Main Advertising Content
The Korea Fair Trade Commission (Chairman Han Ki-Jeong, hereinafter referred to as the "KFTC") has decided to impose a corrective order (a future prohibition order) against NAVER Corporation (hereinafter referred to as "NAVER") for engaging in deceptive advertising in its online advertisements for the NAVER Plus Membership (hereinafter referred to as the "Membership"). The deceptive advertising concerned point accumulation benefits and digital content usage benefits provided upon subscription.
The NAVER Plus Membership is a paid subscription service operated by NAVER (₩4,900 per month), offering additional point accumulation benefits for purchases made on NAVER Smart Store and access to digital content (e.g., NAVER Webtoon) upon subscription.
From June 7, 2022, to June 28, 2022, NAVER conducted an online (mobile and PC) advertising campaign for the second anniversary of NAVER Plus Membership. In doing so, NAVER prominently highlighted the point accumulation and digital content usage benefits while placing important restrictions in locations that were not easily noticeable to consumers. This deceptive practice misled consumers into believing that the benefits were greater than they actually were.
1. Deceptive Advertising Related to Point Accumulation Benefits
NAVER's primary advertisement pages included phrases such as "NAVER Membership accumulation never ends" and "Up to 5% membership accumulation benefits." The points provided can be used like cash when purchasing products on NAVER.
However, NAVER failed to clearly disclose two key restrictions:
① Only purchases up to a cumulative monthly spending of ₩200,000 qualify for 5% accumulation, while amounts exceeding ₩200,000 earn only 2%.
② The maximum accumulation per product is ₩20,000, and multiple purchases of the same item do not allow duplicate accumulation.
Although these were significant restrictions, NAVER did not present them near the main advertisement content. Instead, it placed them on separate pages that required multiple clicks to access, making it difficult for consumers to recognize these limitations.
- Restriction ① was placed on a page that could only be accessed by clicking the "Learn more about membership accumulation" text at the bottom of the main advertisement page.
- Restriction ② was placed on a page requiring two clicks from the main advertisement page, where consumers had to further click on "Product limits and cart purchases" to view the details.
This practice was deemed deceptive advertising, as it misled consumers into believing they would receive greater accumulation benefits than actually available, potentially interfering with rational purchasing decisions.
In a KFTC consumer perception survey, 34.4% of respondents stated that the "point accumulation benefits" had a significant impact on their decision to subscribe, while 45.8% said it had some impact—totaling 80.2% of respondents acknowledging its influence on their decision.
2. Exaggerated and Deceptive Advertising Related to Digital Content Usage Benefits
NAVER's primary advertisement page included the phrase "With so many digital content options" alongside a list of five digital content services available for use:
① NAVER Webtoon (49 cookies)
② NAVER Series On: Discount on one latest movie
③ Series On: Unlimited access to membership-exclusive movies
④ SPOTV NOW: Unlimited sports viewing
⑤ TVING: Unlimited broadcast viewing
However, in reality, subscribers could not use all five services simultaneously but had to select only one per month. Despite this significant restriction, NAVER did not disclose this information near the main advertisement content, instead placing it on separate pages requiring multiple clicks to access.
Furthermore, regarding SPOTV NOW, NAVER advertised phrases such as "Unlimited sports pass" (on the main advertisement page) and "SPOTV NOW: Unlimited sports, TV channels, and VOD viewing" (on the second information page).
However, in reality, subscribers could only watch all matches of the teams to which five pre-selected Korean players belonged. NAVER failed to inform consumers of this important restriction anywhere on the advertisement pages.
These practices were deemed deceptive and exaggerated advertising, as they misled consumers into believing that the digital content usage benefits were greater than they actually were, potentially interfering with rational purchasing decisions.
Significance of This Action
This action is significant because it addresses unfair advertising practices amid increasing competition in the e-commerce sector's paid membership marketing strategies. By detecting and rectifying misleading advertisements related to membership benefits, the KFTC aims to ensure fair competition in the market and provide consumers with accurate information.
Additionally, this decision clarifies that, even in mobile advertisements where space constraints exist, highlighting only consumer benefits while relegating key restrictions to separate pages—effectively making them inaccessible—is a legal violation. The ruling establishes a standard requiring key restrictions to be stated near the main advertising expressions.
With the growing prevalence of the subscription economy, the KFTC plans to continue monitoring and regulating unfair advertising practices related to membership subscriptions.