When social media influencers are paid to post recommendations or reviews on social media, they must clarify that fact and make sure the disclosure is easy to read, the nation’s antitrust watchdog said Tuesday.

The Fair Trade Commission said it had finalized revisions to its advertising guidelines, which deal with how to disclose financial interests when posting reviews on social media. The revisions will take effect Sept. 1.

The guidelines are designed to prevent violations of the law and to provide specific disclosure methods as influencers have increasingly deceived users on YouTube and Instagram by pretending to have bought and used products without having done so, the FTC said.

Under the current law, companies can be punished if they promote products through indirect advertising, or recommendations for which they receive financial compensation.

Last year, the state-run Korea Consumer Agency surveyed 582 commercial postings with many followers on social media, finding that only 174 revealed that they were advertisements. Many of the 174 postings had unclear disclosures at the bottom of the posts, making it difficult for users to understand that they were seeing advertisements.

In November last year, the FTC sanctioned Dyson Korea, LG Household & Health Care, Amorepacific, L’Oreal Korea and LVMH Cosmetics for not informing consumers that they had asked for reviews on social media and paid the reviewers either in money or in free products. 

By Shin Ji-hye (shinjh@heraldcorp.com)