Hello. This is Lawyer Lee Young-kyung from Cheongchul Law Firm.

In the last column, we looked at the revisions to the guidelines for fines under the Advertising Law and the sanctions against the bedding and online education industries.

In this column, based on the press release recently published by the Fair Trade Commission, we will conduct an in-depth analysis of the fashion brand's 'greenwashing', deceptive promotions by overseas famous platforms, and the obstruction of withdrawal from luxury product platforms. Please be aware that this is based on the press release at the time of the Fair Trade Commission's sanctions, and the final decision may change due to lawsuits and other factors.

Cheongchul Law Firm is composed of lawyers who have experience in representing companies in response to investigations by the Fair Trade Commission regarding the Advertising Law and have also received recognition from the court for the legality of sanctions related to violations of the Advertising Law on behalf of the Fair Trade Commission. If you have any questions related to the matters below, please do not hesitate to contact Cheongchul Law Firm.

3. Sanctions against Fashion SPA Brand Operators for Eco-Friendly False Advertising (Greenwashing)

A. Overview of the Case and Violations

The Fair Trade Commission detected four SPA brands, including Musinsa, Shinsung Tongsang (Topten), E-Land World (MISOSPAO), and ITX Korea (Zara), for falsely advertising their leather products as eco-friendly. They used the following phrases in their product names or descriptions on their official sites.

• Main Advertising Phrases: "#EcoLeather", "Eco Leather", "Eco Fur", "Eco Suede", "Environmentally Conscious", "Considering Sustainability", "Eco-Friendly Value Consumption", "ECO LEATHER 100%", etc.

B. Facts Different from Advertisements

However, the reality is that the products they sold were made from petroleum-based fabrics far from being eco-friendly.

• The questioned products were primarily made of petroleum-based fabrics such as polyester or polyurethane. These materials release harmful pollutants such as volatile organic compounds, dimethylformamide, and microplastics during production, which are harmful to both human health and the environment. Additionally, due to their low durability and biodegradability, they are difficult to consider eco-friendly during usage and disposal.

• In particular, the businesses involved purchased pre-made fabrics from abroad without producing their own and there is no record of them ordering eco-friendly processes.

C. Grounds for the Fair Trade Commission's Judgment

• Contents of the Action: According to the Guidelines for the Review of Environmental Claims in Advertising, eco-friendly products must have improved environmental attributes compared to other products; thus, the use of general terms like 'eco' in their advertisement without environmental improvements constitutes false and exaggerated advertising that could mislead consumers. However, since all four businesses acknowledged the violations and voluntarily corrected their actions, a warning was issued.

• Applicable Legal Provisions: Advertising Law Article 3 Paragraph 1 Item 1 (False or Exaggerated Advertisements).

Reference Press Release: May 15, 2025 (Thursday), Sanctions against Eco-Friendly Advertising Law Violations by Four Fashion SPA Brand Operators - Warning issued against Musinsa Co., Shinsung Tongsang Co., E-Land World Co., and ITX Korea (Ltd).

4. Deceptive Sanctions against the Promotion Compensation Conditions of Overseas E-Commerce Platform (Temu)

A. Overview of the Case and Violations

Global platform 'Temu' (Elementary Innovation Private Limited) ran provocative promotional advertisements to encourage app installations and referrals from acquaintances.

1) Advertising the Continuous Provision of Discount Coupons as ‘Limited Time Benefits’

• Main Advertising Content and Circumstances: Temu displayed a pop-up advertisement on its homepage claiming to offer discount coupons worth 150,000 KRW. At this time, a countdown timer displaying “00:00:00.0” was shown, psychologically pressuring consumers as if they would miss out on the coupon if the app was not installed within that time frame.

• However, the reality is that these coupons were continuously available regardless of app installation or time limitations. Even after the remaining time displayed in the advertisement elapsed, accessing the homepage or refreshing the page would cause the advertisement to reappear with a newly displayed remaining time, allowing anyone to receive the coupon at any time.

2) Exaggerating Chances of Winning a '999 KRW Nintendo Switch'

• Main Advertising Content and Circumstances: The promotion carried out through YouTube and other channels claimed to sell high-value items like the Nintendo Switch for 999 KRW on a first-come, first-served basis. The advertisement screen used phrases like “Congratulations! The jackpot has been struck” and “Claim now”, depicting the impression that many people could benefit or definitely obtain one.

• However, the truth is that this promotion was an event where only one person could buy it at the special price of 999 KRW at the designated sale time. Temu misled consumers by advertising this as if multiple products were available, or by suggesting that everyone could win, despite the odds being very slim.

3) A False Advertising of ‘Free Goods’ with Hard-to-Recognize Compensation Conditions

• Main Advertising Content and Circumstances: They conducted a 'coin exchange' and 'hat trick' promotion that encouraged users to refer acquaintances to install the app. The advertisement emphasized that by gathering energy or filling coins through a certain game (like roulette), credits or goods would be provided for free.

• However, the reality is that the actual conditions for receiving the free goods were very strict. Consumers had to invite at least 5 acquaintances to install the app and complete registration to receive rewards. In particular, as consumers approached the reward benchmark of 100 points (coins/energy) (around 99 points or more), the additional reward acquisition would sharply decrease in decimal units, requiring significantly more invitations than anticipated. Temu made this crucial information difficult for consumers to recognize by indicating it only through a small ‘rules' area at the top right of the screen that needed to be clicked to read the entire text.

D. The Fair Trade Commission's Judgment and Grounds

• The Fair Trade Commission determined that advertising the continuous benefits as being time-limited is false and exaggerated, and displaying compensation conditions that require clicking the small 'rules' section at the top of the screen to recognize constitutes deceptive advertising. They issued a correction order (prohibition of the act and announcement order for 6 days) and imposed a fine of 357 million KRW for violations of the Advertising Law, along with a fine of 1 million KRW for violations of the E-Commerce Law.

• Applicable Legal Provisions: Advertising Law Article 3 Paragraph 1 Item 1 (False or Exaggerated Advertisements) and Item 2 (Deceptive). Violations of Article 10 Paragraph 1, Article 12 Paragraph 1, and Article 20 Paragraph 1 of the E-Commerce Law regarding the failure to indicate identity information and unreported telemarketing.

Reference Press Release: June 11, 2025 (Wednesday), Sanctions against Temu for Violations of Advertising Law and E-Commerce Law - Sanctions for deceptive advertising of promotional compensation conditions, fines, and correction orders for failure to indicate identity information and unreported telemarketing.

In Conclusion

These cases indicate that the Fair Trade Commission shows a strong enforcement will regarding the verification of eco-friendliness throughout the life cycle and monitoring of deceptive dark patterns by overseas platforms. Please remember that a single marketing phrase can bring about significant penalties and damage the brand image of a company.

Cheongchul Law Firm is comprised of lawyers from the top 5 large law firms, prosecutors, and in-house legal teams of major corporations, consisting of specialized lawyers in relevant fields who respond as a team rather than just one lawyer. Cheongchul provides comprehensive solutions for overall business issues beyond just resolving specific disputes, focusing on ultimately achieving the goals desired by clients. If you need help achieving your goals, feel free to contact Cheongchul.