Hello, this is Attorney Lee Young-kyung of Cheongchul Law Firm.

On October 27, 2026, the Korea Fair Trade Commission (KFTC) announced its decision to issue a corrective order and impose a surcharge of approximately KRW 20 billion (KRW 20,114,000,000, provisional) on Company A, a major Korean electronics maker, for violating Act on Fair Labeling and Advertising Article 3(1)2 (표시광고법 제3조 제1항 제2호, deceptive advertising). Company A advertised its smartphones and tablet computers without disclosing that ‘the device’s maximum performance is uniformly capped the moment a high-end game is launched.’

The issue was not whether the advertising copy itself was false, but that the company emphasized performance while failing to disclose a material limitation affecting that performance. This makes the case relevant to manufacturers, distributors, and service businesses alike. Cheongchul Law Firm is composed of attorneys specializing in fair trade and labeling/advertising law, with experience both representing the KFTC in having its dispositions upheld in court and representing numerous companies in KFTC investigations, hearings, and litigation.

This article is based on the KFTC press release (distributed on October 27, 2026); the business name and product names have been anonymized.

The Disposition at a Glance

● Respondent: Company A, a major Korean electronics maker (manufactures and sells smartphones and tablets)

● Advertised products: two flagship smartphone series and one tablet series

● Advertising period: one smartphone series from January 15, 2021 to March 21, 2022; the others from February 10, 2022 to March 10, 2022

● Advertising at issue: emphasized superior gaming performance while omitting the fact that maximum performance is capped as soon as a high-end game is launched

● Applicable provision: Act on Fair Labeling and Advertising Article 3(1)2 (표시광고법 제3조 제1항 제2호, deceptive advertising)

● Disposition: corrective order (prohibition of future conduct) + surcharge of KRW 20,114,000,000 (provisional)

1. Background – When Gaming Performance Drove Purchases

The press release describes the period around 2021 as a time when high-end PC games were moving to mobile and high-performance premium smart devices were growing rapidly. Gaming performance, shown through fast screen transitions and rich graphics, was one of the best indicators for demonstrating device performance, and many manufacturers emphasized it in their advertising. The KFTC found that ordinary consumers gave significant weight to gaming performance information when buying expensive smart devices.

2. What the Ads Said and What Was Omitted

The ads – gaming performance front and center

Alongside its new product launches, Company A advertised through its website, promotional videos, launch events, and press releases. Expressions cited in the KFTC press release include “the fastest 5nm AP ever in [our products], carrying you through high-end games,” “the ultimate mobile gaming experience, with a 120Hz display that responds to fast screen transitions and touch,” and “now even in fast-paced games (…) you will fully enjoy quick touch response and smooth screen transitions.”

The omitted fact – maximum performance uniformly capped upon launching a game

According to the press release, when certain high-end games were launched on these devices, the game optimization service’s ‘individual policy’ activated immediately, regardless of the device’s temperature or other conditions, capping the maximum clock speed of the AP (CPU/GPU) and the refresh rate at predetermined values. Unlike the ‘general policy,’ which adjusts performance according to device temperature, the individual policy lowered performance to preset values regardless of the device’s state. In some cases the CPU/GPU clock ceiling was reduced to as low as about 30% of the original maximum performance, and the number of affected games was 82 and 47 for the two smartphone series respectively, and 8 for the tablet.

Consumer complaints and the update

The KFTC stated that games could freeze or lag and graphics quality could drop at the very moments when high performance was needed, and that consumers in fact raised numerous complaints about stuttering and reduced resolution. Around March 2022, Company A released a software update that removed the CPU/GPU maximum clock speed cap and allowed users to enable a ‘Game Performance Mode’ that relaxes thermal control. The KFTC treated the date the cap was removed as the end date of the advertising conduct.

3. The KFTC’s Illegality Analysis – Three Elements

The KFTC stated that the significance of this action lies in confirming that when a business highlights a specific product performance as a key selling point, any material limitation affecting that performance must be indicated so that consumers can clearly recognize it.

4. Implications of This Case

(1) Even true statements can be deceptive advertising through ‘omission’

The press release did not find the advertising copy to be false. It found deception in emphasizing superior performance while not disclosing a material limitation affecting that performance. The fact that ‘nothing untrue was said’ is not a defense.

(2) Marketing and engineering/quality teams must share information

The cap in this case was implemented through a software policy setting. Companies need a process, before running ads, to confirm that the performance the marketing team advertises does not diverge from the actual behavior the development team designed.

(3) Consumer reviews and media coverage serve as evidence of misperception

The KFTC cited consumer review posts and broadcast reports as evidence of consumer misperception. Repeated post-launch complaints in communities and reviews that a product is ‘not as advertised’ can become a lead for an investigation.

(4) Lifting the cap later does not erase liability for ads run before then

Although Company A removed the cap through an update, the KFTC treated the period up to the removal date as the advertising period and imposed the surcharge on that basis. Remedial improvements are necessary, but liability for advertising run before them may be assessed separately.

5. Self-Check Checklist for Performance and Spec Advertising

6. Frequently Asked Questions (FAQ)

Q1. If the advertising copy is true, is there no need to separately disclose limitations?

This case shows otherwise. The KFTC stated that when a specific performance is emphasized as a key selling point, any material limitation affecting that performance must be indicated so that consumers can clearly recognize it.

Q2. What elements are used to determine ‘deceptive advertising’?

The press release in this case assessed three elements in turn: deceptiveness, likelihood of consumer misperception, and impairment of fair trade. The respective issues were the omission of material information, consumers’ mistaken beliefs, and the impairment of rational purchasing decisions.

Q3. Does a large volume of consumer complaints mean a violation?

Complaints alone do not constitute a violation, but in this case reviews and media reports about performance that differed from the impression created by the ads were cited as evidence of consumer misperception. What matters is whether the substance of the complaints ties back to the advertising copy.

Q4. Is the surcharge of approximately KRW 20.1 billion final?

The press release describes the surcharge as ‘approximately KRW 20 billion (provisional),’ specifically KRW 20,114,000,000 (provisional). The final amount cannot be determined from the press release alone, so the written decision and subsequent proceedings should be checked.

Q5. If we face an investigation or hearing, what should we prepare first?

The first priority is to organize the advertising materials by the time they ran, technical documentation on how the product actually operates, and records of consumer complaints received. Because the response strategy depends on the facts, consult an attorney early if you have received notice of an investigation.

7. Cheongchul Law Firm’s Labeling and Advertising Practice

Cheongchul Law Firm is composed of attorneys specializing in fair trade and labeling/advertising law, with experience both representing the KFTC in having its dispositions upheld in court and representing numerous companies in KFTC investigations, hearings, and litigation. Our services include:

● Pre-publication review of performance and spec advertising copy and design of limitation disclosures

● Responding to KFTC investigations and written information requests

● Drafting written opinions on corrective orders and surcharge dispositions and representation at hearings

● Representation in litigation to revoke dispositions

The more an ad emphasizes a product’s performance, the more important it is to check, before running it, whether any limitation affects that performance. Corporate personnel who need pre-publication ad review or help responding to an investigation notice are welcome to contact Cheongchul Law Firm.