Fair Trade Law Q&A - False or Misleading Advertising

1. Pursuant to Article 21, Paragraph 1 of the Fair Trade Act, no enterprise shall make or use false or misleading representations or symbols on the matter that is relevant to goods and is sufficient to affect trading decisions on goods or in advertisements, or in any other way make it known to the public. Paragraph 4 of the same Article applies the foregoing provision mutatis mutandis to services provided by enterprises. Where an enterprise violates the foregoing provisions, the Fair Trade Commission may impose administrative liability on the enterprise pursuant to the first part of Article 42 of the Fair Trade Act.
2. In determining the advertisers that should bear administrative liability under Article 21 of the Fair Trade Act, the Fair Trade Commission examines the facts and circumstances of each case and makes a comprehensive assessment of factors including: the provider of the advertised goods or services; how the advertising content was determined and supervised; the party funding the advertisement; the business name, identifying marks, website address, and other information appearing in the advertisement; the names in which the transactions are concluded; the issuer of invoices; the party that actually conducts the sales and advertising activities and the manner in which such activities are carried out; the overall impression of the trading counterpart; and the allocation of benefits derived from sales generated through the advertisement.