Actresses join misleading 'dark spot removal' ads as businesses evade penalties by simply rebranding

Melasma removal cosmetics advertised by Actress O and famous female comedian J through videos. When applied and removed after a short time, the screen shows it as if the melasma has fallen off, and the celebrities emphasize that it is a "melasma root extraction pack" and that "the skin tone changes." They also claim that "you can see visible changes in blemishes as you apply it." However, the products are general cosmetics with minimal actual melasma removal effects. It is clearly false and exaggerated advertising.

False and exaggerated advertising by celebrities and influencers (individuals with high influence) through SNS (social networking services) is widespread, but government management is not being properly carried out. There are calls for strengthening the responsibility of these individuals and SNS platforms.

According to data received from the Ministry of Food and Drug Safety by Seo Young-seok, a Democratic Party of Korea lawmaker on the National Assembly Health and Welfare Committee, on the 15th, the Ministry of Food and Drug Safety stated that it "does not separately manage cases of unfair advertising in which celebrities or influencers participated as advertising models."

There are many assessments that unfair advertising through celebrities and influencers has become more sophisticated recently. In the past, with television and print ads being central, government pre-review was relatively strict, making it difficult to broadcast fake ads. However, recently, cases of subtle advertising where individuals talk as if sharing personal experiences through short-form content on SNS, YouTube, etc., are noticeable. Yet, this remains a "blind spot" in government management.

In fact, experts say there are almost no cases of punishment for false or exaggerated advertising by celebrities. Kim Tae-min, representative attorney at the Food Advertising Hygiene Law Research Institute, pointed out, "We have never punished an advertising model before," adding, "However, it is not that celebrities themselves do not know they are making exaggerated statements while delivering exaggerated ad lines." He criticized, saying, "Celebrities must also have a minimum sense of responsibility for the products they advertise."

It is pointed out that influencers are rarely caught, and even when enforced, fines are often small. Attorney Kim stated, "Influencers directly sell goods, so they should be punished as sellers for exaggerated advertising, but there are many cases where they only pay fines of 1 to 20 thousand won." He added, "They also conduct group buying (gonggu), but they often delete the posts or videos after uploading them, and instruct people to send direct messages (DMs), making it hard to catch them."

◆ 361 cases of "consumer deception" unfair advertising detected annually on blogs, but no prosecution... Measures such as strengthening responsibility for celebrities and platforms are needed

As a result, one portal blog continued to post consumer-deceptive food advertisements despite hundreds of detections this year. According to data received from the Ministry of Food and Drug Safety by Park Yong-gap, a Democratic Party of Korea lawmaker, one Naver blog was detected 361 times this year for violating the Food Labeling and Advertising Act. However, regarding this, the Ministry of Food and Drug Safety stated, "In the case of personal blogs and SNS, the poster's personal information cannot be verified, so no prosecution measures were taken."

Accordingly, there are suggestions that responsibility should be strengthened for platforms that expose false or exaggerated advertising by celebrities and influencers as is. Jung Ji-young, Secretary-General of the Korea Consumers' League, emphasized, "We must create new regulations to hold influencers who commercially exploit popularity and platforms that create contact points between them and consumers responsible in proportion to the risks of unfair advertising."

Lee Eun-hee, a professor in the Department of Consumer Studies at Inha University, stated, "Measures are needed to prevent consumer damage for models or influencers who advertise and explain products," adding, "Even just requiring that when detected for unfair advertising, the reason and type of penalty received be disclosed on the influencer's broadcast screen can raise awareness. We can consider information disclosure such as displaying it in a certain font size at the bottom of the screen for a few seconds."

Attorney Kim pointed out, "It is difficult to enforce against unfair advertising by influencers etc. with only Ministry of Food and Drug Safety personnel, so it is necessary to secure budget to jointly monitor unfair advertising with consumer groups, etc."

Kwon Oh-sang, a professor in the Department of Food Technology at Seoul National University (former Deputy Director of the Ministry of Food and Drug Safety), emphasized the importance of "smart consumption" along with strengthened government management and supervision to eradicate false and exaggerated advertising. Professor Kwon stated, "Consumers should verify objective grounds rather than blindly believing ads, and actively inquire about or report suspicious ads to the Ministry of Food and Drug Safety," adding, "The more smart consumers there are, the less room false and exaggerated advertising will have, and companies will compete with trust rather than exaggeration."

It is pointed out that a "blind spot in sanctions" exists because even if detected and punished for unfair advertising, one can continue the business by closing down and changing the business owner's name. Administrative penalties for online unfair advertising are inherited based on the legal status of the licensed, registered, or reported company, not the actual operator. Accordingly, even if the same person continues operations, if they are recognized as a separate new business owner after closing down, it may not be linked to the previous company's penalty history.

According to data received from the Ministry of Food and Drug Safety by Seo Young-seok, a Democratic Party of Korea lawmaker on the National Assembly Health and Welfare Committee, on the 15th, existing administrative penalties for cosmetics and medical device companies are passed on to new business owners when legal status is inherited through business transfer, inheritance, or corporate merger. On the other hand, if judged as new operations rather than status inheritance, the previous company's administrative penalties do not apply.

◆ Existing penalties continue only with legal status inheritance... Can be severed if new operations

Closing down or changing the business registration number does not necessarily erase existing penalties. If legal status is inherited, the effect of the penalty continues to the new business owner, and if administrative penalty procedures are in progress, they can continue against the operator who inherited the status. The key is whether the relationship between the existing company and the new business owner is recognized as legal status inheritance.

Aggravated penalties for repeated violations are also applied based on the penalty history of the same company. If the same company receives an administrative penalty again within one year for the same violation, the level of penalty increases, but if judged as a separate new business owner, it is difficult to link past violation history and penalty levels. Even if the actual operator is the same, if they present a different representative or corporation, or business registration number, the structure requires separately verifying the relationship with the existing company.

The problem is that statistics are insufficient to grasp the scale of such re-operations and re-detections. The Ministry of Food and Drug Safety does not separately manage the status of cosmetics and medical device companies being detected after closing down and re-operating using the same representative, address, phone number, shopping mall, etc. Therefore, with current data, it is difficult to confirm how many actual operators continue operations by changing business owners or repeat unfair advertising.

◆ No statistics on re-operations using same representative/address... Management of actual operators needed

The targets of administrative penalties and criminal liability are also distinguished. The Food Labeling and Advertising Act stipulates that no one, including business owners, may engage in unfair labeling or advertising. Individuals such as representatives, sellers, and advertising agencies can also be subject to investigation requests, prosecution, and criminal punishment depending on their degree of involvement in unfair advertising.

On the other hand, administrative penalties such as business suspension and product advertising business suspension are centered around licensed, registered, or reported operators and companies. Administrative penalties against the company and criminal liability for the actual operator individual proceed through separate procedures. It is pointed out that if a company closes down or changes its name, the effectiveness of administrative sanctions such as business suspension may decrease, so procedures to track individuals who led intentional and repeated violations are needed.

The data submitted by the Ministry of Food and Drug Safety did not separately present the status of representatives, sellers, or advertising agencies being subject to investigation requests, prosecution, or punishment for unfair advertising. Accordingly, it is difficult to confirm how much investigation request, prosecution, and criminal punishment has been carried out against actual operator individuals separately from administrative penalties against companies.

Experts suggest that along with strengthening punishments, a system should be established to check past violation history at the registration, reporting, or licensing stage for new business owners. This means verifying whether the same operator is actually continuing the business by comprehensively considering handled products and contact information, shopping malls, etc., not just the representative.

Lee Eun-hee, a professor in the Department of Consumer Studies at Inha University, stated, "Along with raising the level of punishment, past violation history should be checked when registering as a new business owner or receiving reporting/licensing," adding, "We need to check if people detected for unfair advertising are changing names to do business again, and if they are the same business owner, measures such as restricting operations are needed."

Criteria are also needed to identify cases where the nominal representative and the actual operator differ. It is pointed out that it is necessary to judge the substantive connection with existing companies by comprehensively considering various elements such as handled products, phone numbers, and shopping malls, rather than just checking the representative or business registration number.

Professor Lee emphasized, "There are parts that are difficult to verify if someone else is presented as the representative," while adding, "We must do our best to confirm whether the person who caused the problem is doing business again based on various elements such as handled products, phone numbers, and shopping malls."

Claims also emerge that criminal liability and recovery of criminal proceeds for actual operators should be strengthened along with administrative penalties against companies. Kim Tae-min, representative attorney at the Food Advertising Hygiene Law Research Institute, stated, "When repeatedly detected, there are cases where they change business owners under family or others' names or present so-called 'frontmen' to continue operations," adding, "There are limits to only business suspension or fines against companies, so investigation and confiscation/recovery against actual operators must follow."

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