Several major K-beauty companies were found guilty of misinforming consumers after paying influencers on social networks like Instagram to promote their products.
South Korea’s Fair Trade Commission (FTC) ordered seven companies including AmorePacific, LG Household and Health Care and L’Oreal Korea to pay 269 million won (US$228,740) in fines.
The K-beauty companies paid influencers on social media 1.1 billion won (US$936,000) in cash and products in exchange for promoting their products on Instagram. They gave the influencers specific instructions on what hashtags to use as well as the angles for photoshoots.
However, as many as 4177 sponsored posts went on Instagram without any information about the sponsorship arrangement.
The FTC obligates companies to disclose all information on recommendations, guaranties, and others that contain economic interest that may impact the level of trust.
The commission says it plans to revise current instructions to reflect today’s practices on social networks and include provisions that clearly inform consumers on whether a post is sponsored.