Advertisement Fraud

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Though not celebrities, people who wield considerable power in the online social networking world are called "influencers." The Fair Trade Commission has rounded up two cosmetic firms which PAID famous influencers to promote their products, whilekeeping this fact undisclosed.

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The two firms exposed by the trade watchdog are the top two market leaders of Korean cosmetics, Amorepacific and LG Household & Health Care. They are accused of giving advertising payments to renowned social media influencers so they can promote their products, while keeping this fact undisclosed. Under related law, people promoting merchandise via social media must reveal whether they are paid for the advertisement but in many cases, this rule is not abided by. In recent days, a growing number of consumers report experiencing ill-effects after they purchased a product mainly influenced by an online figure who was promoting the item.

[Soundbite] (Consumer who made influencer-swayed purchase(voice altered)) : "I had trust in the social media influencer because I've seen that person's daily life and what not."

In the United States where this issue of influencer marketing has become a public discussion, social media figures are advised to indicate "hashtag advertising" when they are getting paid to promote goods.

[Soundbite] Lee Jong-dae(CEO, influencer marketing firm) : "Exposing brand advertising in a steady manner will allow fans to recognize that the influencer really likes that certain brand and is continuing a long-term marketing relationship with it."

The Fair Trade Commission has concluded inspections into these advertising practices for not only cosmetics but also electric appliances and the dietary food sectors. It will also soon determine the scope of disciplinary measures against firms found to have violated the law.