SEOUL, Nov. 26 (Korea Bizwire) — Several major cosmetics companies were found guilty for misinforming consumers after paying influencers on social networks like Instagram to promote their products.
The Fair Trade Commission (FTC) ordered seven companies including AmorePacific Corp., LG Household and Health Care Ltd, and L’Oreal Korea to pay 269 million won (US$228,740) in fines.
The companies paid influencers on social media 1.1 billion won in cash and products in exchange for promoting their products on Instagram.
They were found to have given specific instructions on what hashtags to use as well as the angles for photoshoots.
However, as many as 4,177 sponsored posts went on Instagram without any information about the sponsorship.
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 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.
H. M. Kang (email@example.com)