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

On 26 August 2026 the Korea Fair Trade Commission (KFTC) imposed a corrective order, a publication order and an administrative fine of KRW 345 million on A, a well-known Korean matchmaking company, for advertising without objective grounds that it had the ‘most in the industry’ members in professional occupations and from prestigious universities, and for falsely advertising that it alone among matchmaking companies was subject to external audit — in violation of Article 3(1)1 of the Act on Fair Labeling and Advertising (the “Labeling and Advertising Act”), covering false or exaggerated labelling and advertising.

The case carries important implications for businesses in every sector that use superiority claims such as ‘most in the industry’, ‘only one in the industry’ or ‘largest’. Cheongchul Law Firm is composed of attorneys specialising in competition and advertising law who have both represented the KFTC in numerous actions to revoke its dispositions and, conversely, represented companies through KFTC investigations and deliberations.

Drawing on experience on both sides, we set out this case from a practical perspective. This column is based on the KFTC press release of 26 August 2026.

The disposition at a glance – unsubstantiated ‘most/only in the industry’ claims are false or exaggerated advertising

From around 2022, A advertised through internet articles, its website, blogs and outdoor advertising (buses) that it had ‘the most professionals in the industry, 5,135’, ‘16,479 members from prestigious universities, the most in the industry’, ‘the only company in the industry subject to external audit’, ‘the only company in Korea filing electronic disclosures with the FSS’ and ‘the largest team in the industry, 230 professional managers’. The KFTC investigation found that these figures were merely in-house statistics based on arbitrary criteria (professional and prestigious-university members), or that competitors were already doing the same thing (external audit), or that the number had been inflated by counting general staff (professional managers). Treating these as false or exaggerated advertising on matters materially affecting consumers’ purchase decisions, the KFTC imposed a corrective order, a publication order and a fine.

● Respondent: A (matchmaking company)

● Advertising period: from as early as April 2022, with some advertisements maintained until the deliberation date (16 July 2026)

● Types of violation: ① ‘most in the industry’ claims as to professional and prestigious-university members ② ‘only in the industry’ external audit claim ③ exaggerated number of professional managers

● Provision applied: Article 3(1)1 of the Labeling and Advertising Act (false or exaggerated labelling and advertising)

● Disposition: corrective order + publication order + administrative fine of KRW 345 million

● Coming change: a bill would raise the fine ceiling from 2% to 10% of turnover and the fixed-sum cap from KRW 500 million to KRW 5 billion

1. Overview – three types of false or exaggerated advertising

Type ① ‘Most in the industry’ membership claims – in-house statistics with no comparison to competitors

From November 2022 A advertised ‘the most professionals in the industry, 5,135’ and ‘16,479 members from prestigious universities, the most in the industry’. ‘Professional members’ meant members working as doctors, dentists, oriental medicine doctors, veterinarians, pharmacists, oriental pharmacists, attorneys, judges, prosecutors, military legal officers, patent attorneys, accountants, tax accountants and appraisers; ‘prestigious-university members’ meant graduates of medical schools, Seoul and capital-area universities, regional national universities, military academies and special institutions such as KAIST — all categories defined by A itself. A merely produced its own membership statistics on those self-set criteria, never comparing them with competitors and holding no objective supporting evidence. Noting that the advertisements rested only on A’s own turnover and total membership, the KFTC found false and exaggerated advertising.

Type ② ‘Only company subject to external audit’ – competitors were already filing disclosures

From 14 April 2022 A advertised that it was ‘the only company in the industry subject to external audit’ and ‘the only company in Korea filing electronic disclosures with the FSS’. The KFTC found that, as of 14 April 2022, another matchmaking company’s audit report was already published on the electronic disclosure system (DART). The word ‘only’ was therefore plainly false. Because being subject to external audit favourably affects perceptions of a company’s financial reliability and can strongly influence purchase decisions, the KFTC treated this as a serious violation.

Type ③ Exaggerated number of professional managers – inflated by counting general staff

From November 2022 until 25 June 2025, A advertised on its website that ‘the industry’s largest team of 230 professional managers provides 2:1 tailored care’. In fact, as of October 2023 only 188 managers specialised in matchmaking between members; the figure of 230 had been inflated by including general staff. The advertisement was assessed as overstating a core element of the service provided to consumers — the number of professional managers and the ratio of care.

2. The governing provision and the KFTC’s test – Article 3(1)1 of the Labeling and Advertising Act

The provision applied in this case is Article 3(1)1 of the Labeling and Advertising Act (false or exaggerated labelling and advertising).

The KFTC’s three-step illegality analysis

The reasoning the KFTC applied in common to each type of violation can be summarised in three steps.

① Divergence from fact: the advertising copy (‘most in the industry’, ‘only in the industry’, ‘230’) differed from the facts (no comparison with competitors, competitors existed, actual headcount) or lacked objective supporting evidence.

② Materiality to the purchase decision: membership numbers, expertise, financial reliability and manager headcount are information consumers weigh heavily when choosing a service provider.

③ Impairment of fair trade: distorting such information impedes rational consumer choice and is likely to undermine fair trading order in the market.

This structure supplies a test applicable to every advertising claim asserting superiority — ‘most in the industry’, ‘number one’, ‘only’, ‘largest’, ‘first’ — not only in matchmaking but across consumer-facing services including private education, clinics, e-commerce, finance and beauty.

3. The disposition and the push to raise Labeling and Advertising Act fines sharply

The KFTC imposed a corrective order and a publication order on A together with a fine of KRW 345 million. The press release also disclosed the intended direction of reform: a bill before the National Assembly (introduced in February 2026) would raise the fixed-sum cap applied where turnover related to the unfair advertising cannot be calculated from KRW 500 million to KRW 5 billion, and the turnover-based ceiling from 2% to 10%. The stated rationale is that consumer harm from unfair advertising is growing with the spread of AI and digital technology while the current caps leave sanctions insufficiently effective. Together with the amendments to the Fair Trade Act and the Subcontracting Act discussed previously (including the KFTC’s new document production duty), the trend reflects the government’s policy of strengthening consumer protection.

4. A pre-clearance checklist for companies using ‘most / only / largest’ claims

Below are the points marketing, legal and compliance staff in service businesses should check before using superiority claims.

5. FAQ from corporate marketing and legal teams

Q1. Are expressions such as ‘most in the industry’ or ‘number one’ always unlawful?

No. They are lawful where objective research or statistics confirm them to be true on comparison with competitors. The problem, as here, arises where a company claims to be ‘the most in the industry’ on statistics built from criteria it set itself, without any real comparison with competitors and without objective supporting evidence. If you use superiority claims, you must obtain and retain the supporting material.

Q2. If I have used ‘only in the industry’ and a competitor later meets the same condition, must I change the advertisement?

Yes. Here, the fact that a competitor was already subject to external audit and filing electronic disclosures as at the date A began advertising (14 April 2022) was central to the finding of illegality. Exclusivity claims such as ‘only’ or ‘first’ require the underlying facts to be re-checked regularly, with immediate correction or withdrawal once they no longer hold.

Q3. On what basis should a headcount (of experts or specialists) be calculated to be safe?

Count only those who actually perform the role claimed (for example, ‘professional manager’). Here, advertising 230 when only 188 managers actually performed matchmaking, by including general staff, was found to be exaggerated. Where staffing changes frequently, the advertised figures must be updated periodically.

Q4. What sanctions follow a violation of the Labeling and Advertising Act?

A corrective order (to cease the conduct and refrain in future), a publication order and an administrative fine may be imposed; here the fine was KRW 345 million. With a bill under discussion in the National Assembly to raise the ceiling from 2% to 10% of turnover and the fixed-sum cap from KRW 500 million to KRW 5 billion, the burden for the same or similar violations is expected to grow substantially.

Q5. How should we audit our existing advertisements for similar expressions?

① Conduct a full review of your website, blogs, social media, outdoor advertising and native advertising; ② list the results of keyword searches for superiority terms such as ‘most’, ‘largest’, ‘number one’, ‘only’ and ‘first’; ③ confirm whether supporting evidence exists for each; ④ correct or delete unsupported expressions immediately; and ⑤ build a process for prior review of future advertising.

6. Cheongchul Law Firm’s advertising risk advisory in competition and advertising law

Cheongchul Law Firm is composed of attorneys specialising in competition and advertising law who have represented the KFTC in administrative litigation in advertising and consumer-related fields under the Fair Trade Act, the Labeling and Advertising Act and the E-Commerce Act, and who have also represented numerous companies through KFTC investigations and deliberations. With practical experience on both the regulator’s and the company’s side, we support advertising risk management through the following services.

● Prior legal review of advertising copy, websites and social media

● Building Labeling and Advertising Act compliance manuals and in-house training for marketing teams

● Responding to KFTC investigations and examiners’ reports and representation at the deliberation stage

● Representation in administrative litigation to revoke corrective orders, publication orders and fines

The A case clearly illustrates the test for violations of the Labeling and Advertising Act, applicable to every consumer-facing service business that uses superiority claims such as ‘most in the industry’, ‘only in the industry’ or ‘largest’. With legislation under way to raise the fine ceilings sharply, prior review of advertising copy and organisation of supporting evidence matter more than ever. If you need copy reviewed, a compliance framework built, or support in responding to a KFTC investigation, please contact Cheongchul Law Firm.