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FTC reports SK head for false humidifier ads

Feb 13,2018
SK Innovation Chairman Kim Chang-geun, who used to be the proxy chairman of SK Group, was among the four former executives of SK Chemical and Aekyung Industrial who were reported to the prosecutors’ office by the Fair Trade Commission on Monday on charges of falsifying ads for toxic humidifier disinfectants.

In reinvestigating the case against SK Chemical, Aekyung and Emart, which closed in 2016, the FTC said it found that these companies sold the products despite knowing that the components were harmful.

On top of reporting the former CEOs to the prosecutors’ office, the FTC slapped them with a combined 134 million won ($123,280) fine. SK Chemical was hit with a fine of 39 million won, Aekyung Industrial with a fine of 88 million won and Emart with a fine of 7 million won.

In addition to Kim, the other CEOs who were turned over to the prosecutor’s office were another SK Chemical CEO and currently the vice chairman of Suwon Chamber of Commerce and Industry, Hong Ji-ho, former Aekyung Industrial CEO and current Aekyung Group and Jeju Air Vice Chairman Ahn Yong-chan and incumbent Aekyung Industrial CEO Ko Kwang-hyun.

For all four of these former executives, their statutes of limitation expire this April. Emart’s executive, however, was not included on the prosecutor’s list.

Between October 2002 and April 2013, SK Chemical manufactured humidifier sterilizers that were sold by Aekyung Industrial. Between May 2006 and August 2011, Emart sold a humidifier sterilizer manufactured by Aekyung Industrial, according to the FTC.

Both products contained toxic antimicrobial substances known as CMIT and MIT. But neither of the products came with a warning label informing consumers that the chemical components were harmful.

Rather, the companies promoted the products as being an effective form of aroma therapy. The humidifier sterilizers were also labeled as if their safety had already been approved.

“The FTC’s decision today has made it clear that the manufacturer and retailer are responsible for providing information about hazardous products through their label or ads,” said an FTC official. “We believe that this will help consumers who have been harmed by the humidifier sterilizer, or potential victims.”

The recent findings by the antitrust agency’s investigation, however, were a reversal of its conclusions in 2012 and in 2016.

Companies like Lotte, Homeplus, Glomn and Oxy Reckitt Benckiser were reported to the prosecutor’s office in 2012 for manufacturing and selling humidifier sterilizers that contained the biocidal disinfectants PHMG and PGH.

But SK Chemical, Aekyung Industrial and Emart were off the hook because there was no proven link between CMIT-MIT and lung damage.


BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]