The Fair Trade Commission issued a corrective order against an advertising agency that provided economic benefits to influencers but had them post restaurant and lodging experience reviews on social media (SNS) without disclosing the benefits.
On the 19th, the commission said that Neopf (formerly Urbanfast), an advertising agency, hid its interest while posting more than 2,300 ads in the form of experience reviews on Instagram through influencers it recruited from July 2020 to December 2023, even though it provided economic benefits such as free food and manuscript fees.
Most advertisers were self-employed in the restaurant and lodging industries, and consumers were in a situation where they could only mistake the posts for voluntary reviews without economic compensation. The commission judged this to be "deceptive advertising" and pointed out that it constitutes a violation of the Act on Fair Labeling and Advertising.
In particular, this case showed that the advertising agency went beyond a simple intermediary role and actively led the illegal conduct. Neopf directly recruited advertisers and linked them with influencers, and it was found to have guided the concealment of economic interests by issuing instructions such as "no ad/sponsorship labels" when writing posts.
The commission imposed a corrective order on Neopf, prohibiting the same conduct going forward. During the investigation, Neopf deleted or edited the ads in question, and it has also halted the problematic ad-agency service.
An official at the commission said, "Being an ad agency does not make you an exception," adding that the measure is intended to block the practice of "backdoor ads" in SNS review advertising that can mislead consumers. The official added, "We will continue to closely inspect the SNS advertising market to ensure that accurate information can be provided to consumers."