Crackdown on firms that pay bloggers

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Crackdown on firms that pay bloggers

The Fair Trade Commission said Thursday that 20 companies have violated the law for paying bloggers in return for positive reviews while concealing their connections with them.

Under a law revised in 2011, companies that compensate bloggers to post good reviews must reveal that the post was paid for.

“These companies hide the fact that they paid money to bloggers, which can affect consumers’ shopping selections,” a spokesman from the FTC said. “Although these posts are no different than advertisements, they are cheating consumers by suggesting the products are recommended by other consumers.”

The consumer watchdog said it ordered 10 companies to post corrections while the rest were given a warning. Three companies - Eva Air, Sony Korea and Boryung Pharmaceutical - were punished with total of 67 million won ($61,700) in fines.

Taiwan-based Eva Air and Sony Korea were ordered to pay 27 million won each, while Boryung was hit with a 13 million won fine.

The FTC said the companies paid money to bloggers through PR agencies, paying from 30,000 won to 150,000 won per post. FTC data showed that Boryung paid 4.95 million won to 42 bloggers, while Sony Korea paid 2.9 million won to 10 bloggers and Eva Air paid 1.6 million won to 16 bloggers.

Since the benefit of these paid posts all went to the advertisers, the FTC said it excluded PR agencies from the correction order. However, it said that PR agencies could face lawsuits under their contracts with their advertisers.

The FTC said it will send a list of paid bloggers to web portal companies like Naver and Daum. Under their own rules, portal companies can cancel the “power blogger” status of bloggers and block displays of their posts.

Last November, the FTC fined four companies a total of 390 million won on the same charge. Oriental Brewery, Caffe Bene, Audi Volkswagen Korea and CTO Communication were all punished. [BY JOO KYUNG-DON]

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