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FTC tackles deceptive Instagram advertising

Sept 06,2018
The Fair Trade Commission said Wednesday it is investigating illegal advertisements by Korean influencers on Instagram.

They plan to either order the companies advertising with them to make changes or slap fines on them if they were found to have discretely paid Instagram stars to post about their products.

The FTC said it has found several cases of suspected paid advertisement on posts uploaded by influencers, such as using content and images provided by advertisers.

However, it has yet to confirm if the influencers received compensation for uploading the suspicious content.

The FTC said it will look into cases that have intentionally increased the exposure of the products or services without revealing financial ties between the influencer and the company. The antitrust agency suspects that on Instagram, products and services are advertised by a large number of posts, unlike other platforms where more information can be contained in a single post. Instagram is currently the second most popular social network after Facebook in Korea and is seeing the sharpest growth.

In 2014 the government cracked down on false advertisements from power bloggers that were disguised as legitimate reviews.

Oriental Brewery, Audi Volkswagen Korea, Cafe Bene and CTO Communication, a shopping website, were hit with combined fines worth 300 million won ($267,020) for hiding their payments to bloggers in exchange for positive reviews and promotion.

That same year, the FTC started requiring bloggers to specify the compensation that they received for the products that they recommend or review, including payment in cash or gift certificates.

“Through the investigation, the social network’s role in mutually sharing [legitimate] experiences among consumers will improve,” said In Min-ho, director of the FTC’s consumer protection department.

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