Controversy is growing over Korean YouTubers' undisclosed sponsorship as some big name influencers have been found to have advertised products in their videos without mentioning they were being compensated for featuring them.
As the video streaming platform continues to grow as a prime channel for marketing, criticism is also growing over deceptive video advertising, but related regulations still remain at patchwork level, punishing traditional advertisers only, while letting YouTubers avoid legal responsibilities.
According to the Fair Trade Commission (FTC), new advertising guidelines on video streaming platforms and social network services (SNS) will take effect Sept. 1.
In the guidelines, the FTC enhanced rules on fair advertising. In terms of YouTube video clips, the content uploader must specify the clip contains ads in the title or in the clip itself by using a banner. Also the uploader is required to notify that they are advertising at the start and end of the video.
For real-time streaming platforms, the antitrust watchdog demanded streamers to inform viewers that they are advertising once every five minutes.
The guidelines came amid a number of big name streamers and YouTubers becoming mired in controversy as they uploaded video content without disclosing that they were sponsored.
Sandbox Network, a company of 431 YouTubers, on Aug. 7 uploaded a video clip on YouTube apologizing for some of the content made by its members who omitted ad notices even though they were advertising products. Sandbox Network is known for its chief content creator Ddotty, having 2.53 million subscribers as of Aug. 10.
Before Sandbox's apology, Tzuyang, a YouTuber having 2.65 million subscribers for her eating show, apologized for not pointing to advertisements in some of her early videos and announced she would quit uploading to YouTube.
Along with them, a number of influential content creators posted apology video clips on YouTube for their inappropriate advertising, with many fans expressing anger over being "deceived."
Bokyem, who has approximately 4 million subscribers on YouTube, also posted an apology that he did not clearly state there was advertising in five of his video clips, sponsored by advertisers including chicken franchise BBQ and barbeque franchise Myeong Ryun Jinsa Galbi.
BBQ and Myeong Ryun are also under fire for their part in YouTubers' deceptive advertising.
According to YouTuber Yangpang, who has 2 million subscribers, BBQ paid her in return for eating the brand's chicken during her video clip uploaded in April. Even though Yangpang denied advertising during the show, BBQ took no measures against this saying the company thought the content was at her and her company's discretion until she posted an apology video on Monday. Myeong Ryun is also facing similar criticism for not taking measures on undisclosed advertising.
The controversies have grown because there have been no effective regulations governing the medium here so far.
In November last year, the FTC fined seven companies including Dyson, LG Household & Health Care and AmorePacific 270 million won for participating in undisclosed ad campaigns with influencers on Instagram. In this case, however, the influencers' actions didn't draw regulatory attention.
According to the FTC, the guidelines are "standards" for it to judge whether an action is violating the Act on Fair Labeling and Advertising. And the act allows action to be taken against the advertising company, but there are no regulations to keep deceptive streamers or content creators in check.
"The FTC can file complaints with the prosecution against advertising companies, not the content creators or streamers," an official at the FTC said.
To prevent more deceptive advertising, former Rep. Won Yoo-chul during the previous National Assembly tabled a bill in January aimed at imposing fines on influencers who post deceptive advertising, but it failed to pass as the 20th National Assembly ended before it could be addressed.
"Even if there are regulations, questions remain on how to crackdown on violators," a retail company official said. "Given that a flourishing number of streamers and influencers are creating their own content, there seems to be no practical way of monitoring them."
"While the media environment is changing fast, regulations are not catching up with the changes. With advertising on new media platforms being regulated by patchwork rules, damage to consumers is expected to grow," he said.
source: The Korea Times