Apple AI is a 'Shell'... Fair Trade Commission to Launch Investigation into False Advertising?
Apple Intelligence AI System Ads
Seoul YMCA Alleges False and Exaggerated Advertising
Apple, which has been criticized by the Fair Trade Commission (FTC) for abusing advertising fees and commissions, is once again facing an FTC investigation. This comes amid allegations that Apple's artificial intelligence (AI) system 'Apple Intelligence' advertisements constitute false and exaggerated advertising.
According to government and industry sources on the 3rd, the FTC has received a report regarding violations of the "Act on Fair Labeling and Advertising" (Fair Labeling and Advertising Act) by Apple Intelligence and is reviewing an investigation. This is a preliminary step before the FTC formally launches an investigation, with a high possibility of proceeding to a full investigation later.
Earlier, the civic group Seoul YMCA reported to the FTC, claiming that "Apple Intelligence is merely a 'shell' missing core functions, yet Apple advertised it as a major feature of the new iPhone," and demanded compensation measures for consumers who purchased the iPhone 16 series. In advertising the new iPhone 16 and 16e, Apple emphasized next-generation on-device AI Siri and personalized information services, but these features were not applied. Although Korean language support for Apple Intelligence began with the iOS 18.4 update released on the 1st, the core functions of Intelligence remain absent.
Seoul YMCA also pointed to a U.S. consumer class-action lawsuit filed against Apple. The lawsuit alleges that Apple deceived consumers by advertising features that were not actually supported and charged premium prices. It was revealed that Apple had internally expressed concerns about some Apple Intelligence functions not working properly as advertised, which was used as grounds for the lawsuit, according to Seoul YMCA.
Despite this situation, Seoul YMCA criticized Apple for continuing to promote and sell the product on its official website under the banner of 'Korean-language Apple Intelligence,' thereby expanding consumer harm. They urged, "Apple must immediately stop deceiving consumers and clearly notify them of exactly which functions are excluded without omission," and requested, "The FTC should promptly investigate, take action, and refer the case to the prosecution to strictly prevent further consumer damage."
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Meanwhile, the FTC began investigating Apple in 2016 for shifting part of the advertising costs for new products like the iPhone onto mobile carriers. At that time, Apple proposed its own corrective measures instead of paying fines. In 2022, the FTC started an investigation following reports that Apple overcharged in-app payment commissions from domestic app developers. By the end of that year, Apple adjusted the commission rates for domestic developers to be the same as those for overseas developers.
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