The Fair Trade Commission has imposed sanctions on Naver over allegations that it engaged in exaggerated advertising, including exaggerating benefits while promoting affiliate cards and paid memberships. ⓒ Yonhap News
The Fair Trade Commission began sanctions in connection with allegations that Naver engaged in exaggerated advertising, including exaggerating benefits while promoting affiliate cards and paid memberships.
According to the industry on the 13th, the Fair Trade Commission (hereinafter referred to as the Fair Trade Commission) recently sent a review report (the prosecution's indictment) to Naver containing its opinion on sanctions for violating the Labeling and Advertising Act.
The two main problems pointed out this time are ‘exaggeration of affiliate card benefits’ and ‘inflated membership subscribers.’ Naver advertised the affiliated card 'Naver Hyundai Card', saying, "You can receive Naver Pay points worth up to 11.42 million won per month by accumulating Naver membership."
However, the actual benefits turned out to be much smaller than what was advertised. The 5% Naver membership savings could only be received when purchasing certain products eligible for savings. Even this only applied up to a monthly usage amount of 200,000 won. There is no monthly limit for products that are not subject to accumulation, but the accumulation rate was extremely low at 1%.Another problem was pointed out was that detailed information related to benefits was hidden in places that were difficult for consumers to find. It is said that Naver made it difficult for consumers to confirm by announcing specific details, including accumulation limit restrictions, on a separate page that can only be accessed by clicking the 'Check the terms and conditions of benefit provision, etc.' button.
It was also reported that the review report included an advertisement that inflated the number of subscribers to the paid subscription service 'Naver Plus Membership'.
It has been reported that the Fair Trade Commission's Market Surveillance Department considered Naver's advertising behavior to be false and exaggerated advertising that deceives consumers and issued a recommendation for sanctions. The Fair Trade Commission plans to hold a plenary meeting soon to decide whether to impose sanctions and the level of sanctions.
The Fair Trade Commission is also investigating allegations of Naver's 'interference with early termination of membership.' Typically, membership contract termination types are divided into early termination and general termination. In the case of early cancellation, the contract is terminated immediately upon application, use is terminated, and the remaining amount excluding the usage portion of the music service voucher amount paid by the consumer is refunded.However, it was found that 'Naver Plus Membership' was operated in a way that even if an early cancellation was requested, the difference would not be refunded and the service would be maintained until the end of the month.
The Fair Trade Commission conducted an on-site investigation early this month on Naver, Coupang, and Market Curly, which operate membership services in this way, and obtained related data. The Fair Trade Commission plans to conduct an investigation of those involved based on the obtained data and then decide whether to impose sanctions.
Digital Team Reporter Kim Eun-jeong ejk1407@naver.com
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