Korea Railroad Corporation received a corrective order from the Fair Trade Commission for displaying higher KTX first-class discount rates than actual rates.
On the 23rd, the Fair Trade Commission announced that it issued a corrective order (prohibition order) to the Korea Railroad Corporation on charges of violating the Act on Fair Labeling and Advertising (deceptive labeling and advertising).
The Korea Railroad Corporation was accused of omitting or downplaying important purchasing information while displaying KTX ticket discount rates via mobile apps and the website from Oct. 29, 2014, to Nov. 3, 2021.
The corporation used phrases like “↓30% discount” and “↓20% discount” on the app, raising concerns that consumers might misunderstand these as discounts on the final payment amount. In fact, the corporation's discount rate was only applied to the “fare,” a part of the KTX first-class and business-class ticket prices, not to the “fee.”
For example, in the case of a KTX first-class ticket from Seoul to Busan priced at 83,700 won, even when the phrase “30% discount” was used, the actual final purchase price was 65,800 won, discounted by 21.4%. This is because the discount rate was not applied to the fee (23,900 won).
The Fair Trade Commission determined that such discount rate labeling constituted deceptive advertising that could hinder consumers from making reasonable purchasing decisions. The corporation included the notice “Discounts are only applied to the fare” on the ticket purchasing screen. However, the Fair Trade Commission pointed out that without detailed information about the first-class pricing structure, it was difficult for consumers to clearly understand this.
However, the Fair Trade Commission did not impose any penalty surcharge considering that the corporation promptly corrected the labeling when the issue was reported in the media in 2021, provided some related guidance, and had no intent to deceive.
A Fair Trade Commission representative noted, “Even if facts can be verified through laws or terms, unfairness should be judged based on the overall impression that ordinary consumers receive from advertisements,” emphasizing the need for more careful attention to discount rate labeling and advertising in the future.