No AI Technology, Yet an AI Product? ... Comments Sought on Guidelines to Crack Down on 'AI Washing'

Guidelines to Curb "AI Washing"
To Be Finalized After Hearing from Stakeholders and Others

The Korea Fair Trade Commission (KFTC) has begun developing standards to curb so-called “AI-washing,” in which companies mislead consumers by exaggerating the capabilities of artificial intelligence (AI) or concealing its limitations.

The KFTC said on October 22 that it had released a draft of its “Guidelines on the Labeling and Advertising of Artificial Intelligence” and would gather opinions from stakeholders, experts, and others from October 22 through November 11. With AI-powered products flooding the market and marketing using virtual figures and deepfakes proliferating, the commission aims to hear from a range of groups before finalizing clear government-level guidelines.

The move comes as more companies exploit consumers’ high expectations for AI technology. According to a survey on consumer perceptions conducted by the Korea Consumer Agency in November 2025, 57.9% of respondents said they were willing to pay an average premium of about 21% for products using AI compared with ordinary products. As consumers’ preference for AI products has become more pronounced, even at a higher price, cases have continued to emerge in which companies make products appear to use AI when they do not, or conceal important information such as operating conditions, causing harm to vulnerable consumers, including older people.

To prevent violations of the law and improve market predictability, the KFTC has issued a draft that spells out the four general principles under the Act on Fair Labeling and Advertising. The draft classifies unfair labeling and advertising into four categories—false or exaggerated claims, deception, unfair comparisons, and disparagement—and sets out specific criteria for assessing them. Examples that could face sanctions include touting a simple sensor-based auxiliary function as having expert-level capabilities, and recommending a product through an AI-generated virtual figure without disclosing that the figure is virtual. To help businesses and consumers understand the guidelines, the draft also includes 16 product-specific simulated cases involving items with a high potential for consumer harm, such as robot vacuum cleaners and posture-correcting chairs, along with a self-assessment checklist for businesses.

The draft also clarifies when “AI” may be used in product names. The term may be used in a product name only when AI technology is linked to the product’s primary function. If AI is used only for an ancillary function, the scope of its use must be clearly stated near the product name. The draft also specifies that, under relevant legal revisions, recommendations or endorsements by AI-generated virtual experts are prohibited outright in advertisements for food, cosmetics, and pharmaceuticals. The KFTC plans to consult with relevant government agencies, then finalize and distribute the guidelines based on the supportive, opposing, and proposed revision comments received during the consultation period.

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