17,000 Cases of Undisclosed Advertising Detected in 9 Months... Consumer Complaints Increase 5.2 Times in 5 Years

Fair Trade Commission Monitored Undisclosed Ads for 9 Months, Detected 17,020 Cases
9,358 Cases Found on Instagram, 7,383 on Naver Blog
Consumer Complaints Surge... SNS Ad Trust Declines

[Asia Economy Sejong=Reporter Lee Jun-hyung] It has been revealed that more than 17,000 cases of 'hidden advertisements' were detected over the past nine months. Hidden advertisements refer to unfair advertising where payment is received for advertising but the advertisement status is not properly disclosed. Consumer complaints about social network service (SNS) advertisements have increased 5.2 times over the past five years.

The Fair Trade Commission (FTC) announced on the 2nd that it conducted monitoring of deceptive review-type advertisements (hidden advertisements) on major SNS platforms such as Instagram, YouTube, and Naver Blog from April to December last year, and detected 17,020 violating posts. Among major SNS platforms, Instagram had the highest number of hidden advertisements with 9,358 cases, followed by Naver Blog (7,383 cases) and YouTube (99 cases).

Specifically, 4 out of 10 hidden advertisements (38.8%) displayed the advertisement status in inappropriate places. On Instagram, the phrases indicating advertisement status were hidden under 'See More' or written between hashtags (#).

Monthly Monitoring Performance Trends of Instagram Unfair Advertising.
[Photo by Korea Fair Trade Commission]

Non-disclosure of Advertisement Status Also Not Insignificant

There were also a considerable number of hidden advertisements that did not disclose the advertisement status at all. Hidden advertisements without any disclosure accounted for 7,330 cases, representing 35.3% of all violating posts. Posts violating the expression method were detected in 3,058 cases (14.7%). These included cases on Naver Blog where the advertisement status was written in font sizes or colors that made it difficult to recognize.

The field with the most hidden advertisements was product posts. Product-related hidden advertisements numbered 14,691, more than six times the 2,329 cases related to services. The FTC explained that this seems to be due to the relative ease of requesting product reviews and writing advertisement posts compared to services. The products with the highest proportion of hidden advertisements were cosmetics and health functional foods.

As a result of the FTC requesting voluntary corrections from hidden advertisement creators and advertisers, 31,829 posts were modified. This is nearly twice the number of detected cases (17,020). Among voluntarily corrected hidden advertisements, Instagram had the most with 16,493 cases, followed by Naver Blog (15,269 cases) and YouTube (67 cases).

Consumer complaints related to SNS advertisements have increased more than fivefold over the past five years. This is based on an analysis by the Korea Consumer Agency of consultation cases received by the '1372 Consumer Counseling Center' from January 2016 to October last year. The average monthly number of consumer consultations related to SNS advertisements increased about 5.2 times, from 2.7 cases in 2016 to 16.8 cases last year.

Regarding the reasons for consultations, 'delivery delays and loss of contact with the business' after payment accounted for the largest share at 32.6%. This was followed by 'withdrawal of subscription and contract cancellation (29.1%)', 'quality complaints (14.8%)', and 'contract violations (11.4%)'.

Status of consumer consultation receipts related to social networking service (SNS) advertisements.
[Photo by Korea Fair Trade Commission]

Low Consumer Trust

Consumer trust in SNS advertisements was lower than in other media. According to a survey conducted by the Korea Consumer Agency in November last year targeting 500 consumers aged 19 and older who had experience with SNS advertisements, more than half of consumers (52%) responded that unfair advertisements are more prevalent on SNS than on other media such as TV and newspapers.

Only 24.8% (124 people) of consumers had experience using the SNS unfair advertisement reporting function. Among consumers who had not used the reporting function, 7 out of 10 (263 people) answered that they did not believe appropriate measures would be taken even if they used the reporting function. Key measures to minimize consumer damage caused by hidden advertisements included 'strengthening regulations on unfair advertisements by SNS operators' and 'enhancing monitoring and corrective actions on unfair advertisements by government and public institutions.'

The FTC plans to continuously monitor hidden advertisements on major SNS platforms this year as well. If habitual or serious legal violations are detected through monitoring, the FTC intends to take action under the 'Act on Fair Labeling and Advertising.'

An FTC official stated, "SNS unfair advertisements can be easily made by ordinary people without awareness of violating the law, so uniform law enforcement and punishment alone are not the solution," adding, "It is also necessary for private sector efforts to purify the environment, such as SNS operators deleting posts that violate their policies."

This content was produced with the assistance of AI translation services.