Fair Trade Commission to begin sanctions against Naver over ‘exaggerated advertisement suspicions’

,

[Naver Hyundai Card (Homepage Screenshot=Yonhap News)]

,

,
“Naver is under scrutiny by the Fair Trade Commission for allegedly engaging in exaggerated advertising practices such as inflating benefits when promoting affiliated credit cards and paid memberships.”,

,

,
“On the 13th, according to industry sources, the Fair Trade Commission sent a review report containing sanction opinions on Naver’s violations of the Act on Display Advertisement Practices.”,

,

,
“The main points of contention include ‘exaggerated benefits of affiliated credit cards’ and ‘inflating the number of membership sign-ups.'”,

,

,
“Naver advertised its affiliated card, ‘Naver Hyundai Card,’ stating that by using it, individuals could receive up to 10% in Naver Pay points (5% from Naver membership points and an additional 5% from Naver Hyundai Card) with a monthly cap of 1,142,000 won.”,

,

,
“However, the actual benefits were found to be much less than what was advertised.”,

,

,
“The 5% Naver membership points can only be earned when purchasing certain designated products, and even then, it was limited to monthly usage up to 200,000 won.”,

,

,
“For products not eligible for points, there was no monthly limit but the accrual rate was only 1%.”,

,

,
“It was also criticized that detailed benefit information was hidden in hard-to-find locations for consumers.”,

,

,
“Specific details such as the point accrual limits were only posted on a separate page accessible by clicking the ‘Check Important Information on Benefits’ button, making it difficult for consumers to verify.”,

,

,
“The review report also reportedly mentioned that Naver advertised by inflating the number of subscribers to its paid subscription service, ‘Naver Plus Membership.'”,

,

,
“According to the Fair Trade Commission, Naver included family and friends who could be invited for free (up to three members) and canceled members in the subscriber count to encourage new sign-ups, thus engaging in exaggerated advertising.”,

,

,
“The Fair Trade Commission’s Market Surveillance Division, which investigated the case, deemed Naver’s advertising practices as false and exaggerated advertising that misleads consumers.”,

,

,
“The Fair Trade Commission plans to convene a plenary meeting soon to decide on the level of sanctions.”,

,

,
“The Fair Trade Commission is also investigating allegations of Naver’s ‘interference with mid-term subscription cancellations.'”,

,

,
“Subscription cancellations are classified into mid-term and general cancellations.”,

,

,
“In mid-term cancellations, the contract is terminated immediately upon request, and the services are discontinued, with the unused portion of the music service fee that the consumer paid refunded, excluding the part used.”,

,

,
“However, it was found that Naver Plus Membership operated in a way where even if mid-term cancellation was requested, the price difference was not refunded, and the service continued until the end of the month. In essence, mid-term service cancellation was not possible.”,

,

,
“The Fair Trade Commission conducted on-site investigations earlier this month on Naver, Coupang, and Market Kurly, which operate subscription services in a similar manner.”,

,

,
“The Fair Trade Commission plans to proceed with investigations of relevant parties based on the acquired data and then decide on the level of sanctions.”,

,

,

,