In Korea, advertising is primarily regulated by the Fair Labeling and Advertising Act (the "Advertising Act"). The Korea Fair Trade Commission ("KFTC") enforces the Advertising Act with a range of possible sanctions, including corrective orders and monetary fines. Assessment of sanctions can be challenged through administrative proceedings. Below is a summary of some of the notable KFTC decisions and court judgments rendered in 2014 under the Advertising Act.
Deceptive Advertising on Internet Shopping Malls
In June 2011, the KFTC imposed corrective orders and monetary fines against certain internet shopping mall operators for deceptive advertising. The practice at issue was displaying certain products as "premium products," "best sellers," or "popular products" only if the sellers of those products had paid extra for such labeling.
The open market operators filed an action to nullify the KFTC's decision, but in June 2014, the Supreme Court dismissed the action, finding that the above practice could deceive or mislead consumers as it concealed or curtailed important facts.
Deceptive Advertising of Athletic Footwear
At issue were certain advertisements of global footwear manufacturers that combined figures regarding levels of muscle activities and calories burned and expressions regarding diet, and thereby conveyed that use of their shoes could lead to a slim figure. In September 2014, the KFTC ruled that the manufacturers falsified and exaggerated the potential benefits of their shoes without objective figures or evidence, and imposed corrective orders and monetary fines against them.
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