Hello, this is Attorney Lee Young-kyung from the Law Firm Cheongchul.
We will look into the Advertising Regulations that medical institutions, medical professionals, and businesses that handle medical advertising must know, including the Medical Law and the Fair Labeling and Advertising Act.
The Law Firm Cheongchul provides consulting to various medical-related companies and medical institutions, including medical information platforms and health check-up reservation platforms, and is composed of lawyers who have experience advising numerous businesses on advertising and have represented clients in administrative lawsuits related to advertising before the Fair Trade Commission.
[Question]
What is the content of the Fair Labeling and Advertising Act that applies to medical advertising?
[Answer]
The ‘Fair Labeling and Advertising Act’ (hereinafter referred to as Advertising Act) is a law aimed at preventing businesses from deceiving or misleading consumers through unfair labeling or advertising practices and establishing fair market order. This law regulates advertising practices not only in medical advertising but across various industries, particularly focusing on preventing false or exaggerated advertisements that impede consumers' rational choices.
In the case of medical advertising, both the Medical Law and the Fair Labeling and Advertising Act regulations apply, so both laws must be considered when planning advertisements.
1. Unfair advertisements prohibited by the Fair Labeling and Advertising Act
Article 3 of the Advertising Act presents four types of unfair labeling and advertising, which are ① false and exaggerated labeling and advertising, ② deceptive labeling and advertising, ③ unfair comparative labeling and advertising, and ④ disparaging labeling and advertising.
Article 3 (Prohibition of Unfair Labeling and Advertising) ① Business operators must not engage in labeling or advertising practices that deceive consumers or are likely to cause misunderstanding, thus disturbing fair trade order through the following acts or cause other businesses to do so. 1. False and exaggerated labeling and advertising 2. Deceptive labeling and advertising 3. Unfair comparative labeling and advertising 4. Disparaging labeling and advertising ② The specific content of the acts in each subparagraph of paragraph 1 shall be determined by Presidential Decree.
Enforcement Decree of the Fair Labeling and Advertising Act Article 3 (Contents of Unfair Labeling and Advertising) ① False and exaggerated labeling and advertising in accordance with Article 3(1)(1) of the Act is defined as labeling or advertising that is different from the facts or excessively inflates the facts. ② Deceptive labeling and advertising in accordance with Article 3(1)(2) is defined as labeling or advertising that conceals or minimizes the facts. ③ Unfair comparative labeling and advertising in accordance with Article 3(1)(3) is defined as labeling or advertising that fails to clearly state the comparison target and criteria or compares its own products or services (hereinafter referred to as "products") to those of other businesses or business groups without objective grounds, stating that it is superior or advantageous. ④ Disparaging labeling and advertising in accordance with Article 3(1)(4) is defined as labeling or advertising that disparages others through ungrounded content regarding other businesses or their products or only shows unfavorable facts. ⑤ The specific types or standards of unfair labeling and advertising according to paragraphs 1 to 4 may be prescribed and notified by the Fair Trade Commission. The Fair Trade Commission must consult with the heads of relevant administrative agencies in advance. |
In summary, the advertising activities prohibited by the Fair Labeling and Advertising Act are those that ① fall under the types of unfair advertisements defined in the Advertising Act, ② raise concerns of consumer misunderstanding, and ③ are likely to disrupt fair trade order.
The content and judgment criteria regarding consumer misunderstanding and disruption of fair trade order are detailed in the Fair Trade Commission's ‘Designation of Types and Standards of Unfair Labeling and Advertising Acts’.
Consumer misunderstanding refers to the likelihood that the advertisement may deceive consumers or cause them to be misled, determined by the probability of misleading consumers or abstract risk (Fair Trade Commission’s ‘Designation of Types and Standards of Unfair Labeling and Advertising Acts’, hereinafter referred to as ‘Unfair Labeling and Advertising Notification’).
When determining probability and abstract risk, it means
1) the judgment is based on the reasonable awareness of an ‘ordinary consumer with normal attention’ rather than a person with professional knowledge in the field or someone with low attention, and
2) it indicates that as long as there is a tendency and possibility to mislead consumers, it is sufficient, and there is no requirement to prove or claim that they were actually deceived.
Disruption of fair trade order is judged based on whether the advertisement itself may hinder the reasonable purchasing decisions of consumers, thereby likely disrupting fair trade order in the relevant market.
The Fair Trade Commission recognizes that the fact that a business operator has informed a consumer of specific content through labeling and advertising means that the business operator is aware that such content could influence the consumer's purchasing decisions. Therefore, in cases where the business operator communicates matters that fall under any of the items in Article 2, paragraph 1 of the Act in a false or exaggerated manner, there is a high likelihood that disruption of fair trade order is recognized.
That is, when a business operator conceals, minimizes, or omits specific content,
1) if the content relates to the essential functions, performance, efficacy, quality, etc. of the product,
2) if the content relates to health and safety,
3) if the content relates to price, withdrawal rights,
4) if the content relates to economic interests between the advertiser and the endorser,
5) or if there is a possibility of damage due to the consumer’s inability to recognize the content, generally, if the omitted, minimized, or concealed content relates to significant factors that could influence the consumer's purchasing decision,
there is a high likelihood that disruption of fair trade order will be recognized.
On the other hand, if the Fair Trade Commission determines that the omitted, minimized, or concealed content does not fall into any of the categories 1) to 5), additional grounds are needed to establish that the content relates to significant matters that may influence consumer purchasing decisions.
2. Actual punitive cases
The Ministry of Health and Welfare has conducted monitoring for unfair advertisements in dental and plastic surgery medical institutions and identified various cases.
In the dental field:
• Advertising false claims of being ‘implants specialists’ or ‘implant specialty hospitals’ that are not recognized by current medical laws,
• Advertising by exaggerating the facilities and scale of dental clinics,
• Advertising by exaggerating the careers and the number of treatments performed by medical staff,
• Other false and exaggerated advertising practices (such as advertising implants for the price of gold teeth, the world's only sterile implants, and elderly specialty implants),
In the plastic surgery field:
• Actions of inflating surgical effects by taking before-and-after photos under different conditions,
• Advertising that exaggerates surgical experiences without objective grounds (e.g., advertising “Over 10,000 surgeries conducted”),
• Acts of deceiving consumers by failing to disclose that advertising agents or hospital employees wrote the posts while making it seem like consumers posted their own reviews on blogs were problematic.
If one violates the Fair Labeling and Advertising Act, they can face up to 2 years of imprisonment or a fine of up to 150 million won depending on the type of violation (Article 17 of the Fair Labeling and Advertising Act). Additionally, if they obstruct investigations by the Fair Trade Commission or commit violations, they may also face administrative fines (Article 20 of the Fair Labeling and Advertising Act), thus it would be advisable to consult a lawyer with expertise in fair trade and advertising before proceeding with medical advertisements.
The Law Firm Cheongchul provides consulting to numerous medical institutions, medical advertising platforms, and health check-up reservation platforms and holds expertise in medical laws, medical device laws, and more. Lawyers from Cheongchul, coming from large law firms and conglomerates, directly handle clients’ cases.
If you are considering legal matters or consultations related to medical laws, please feel free to contact us.
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