- Chapter 1 General Provisions
- Chapter 2 Prohibition of Unfair labeling and Advertising
- Article 3. Prohibition of Unfair labeling and Advertising
- Article 4 Designation of Critical Information to Be Included in Labeling and Advertising
- Article 5 Substantiation of Labels and Advertisements
- Article 6 Prohibition of Trade Associations' Restricting labeling and Advertising Activities by Members
- Article 7 Corrective Measures
- Article 8 Temporary Cease and Desist Order
- Article 9 Surcharge
- Chapter 3 Claim for Damages
- Chapter 4 Supplementary Provisions
- Article 12 Obligation of Confidentiality
- Article 13 Consultations on the Enactment of Acts Prohibiting or Restricting Labeling or Advertising
- Article 14 Voluntary Establishment of a Code of Labeling and Advertising
- Article 15 Cooperation by the Heads of Relevant Agencies, etc.
- Article 16 Application of Monopoly Regulation and Fair Trade Act
- Chapter 5 Penal Provisions
- Addendum
Fair Labelling and Advertising Act
Enacted by law No. 5814, Feb. 5, 1999
Chapter 1
General Provisions
Article 1 Purpose
The purpose of this Act is to prevent unfair labelling and advertising that may deceive or mislead consumers and to facilitate provision of fair and useful information to consumers, thereby establishing a fair trade order and protecting consumers.
Article 2 Definitions
For the purpose of this Act -
1. the term "labeling" means a container or package (including attachment and contents) of the goods or services (hereinafter "products") on which the enterprises or trade associations put a notice of the following information; or Chinese characters or figures featured on the signboards that are installed in the shops and containers or package that characterize the given products:
a. information regarding the enterprise and the trade association along with that of other enterprises and trade associations;
b. information regarding the contents, terms of trade, and others in relation with the product by the enterprise and the trade association along with that of others.
2. The term "Advertising" means enterprises or trade associations' letting known to or informing consumers of the product-related information set forth in the items of Subparagraph 1 through newspapers, broadcasting, magazines and other means as prescribed under the Presidential Decree.
3. The term "Enterprise" means those as defined in Article 2, Paragraph 1 of the Monopoly Regulation and Fair Trade Act (hereinafter, the "MRFTA").
4. The term "Trade Association" means those as defined in Article 2, Paragraph 4 of the Monopoly Regulation and Fair Trade Act.
5. The term "Consumer" means those who use goods and services provided by enterprises or trade associations (hereinafter "enterprises").
Chapter 2
Prohibition of Unfair labeling and Advertising
Article 3. Prohibition of Unfair labeling and Advertising
(1) Enterprises, etc. shall not post labels or advertisements as set forth in the following subparagraphs that may deceive or mislead consumers, thus impairing fair trade order, nor shall they force other enterprises to do so:
1. false or exaggerating labeling and advertising;
2. deceptive labeling and advertising;
3. unduly comparative labeling and advertising;
4. slanderous labeling and advertising.
(2) The specifics of the aforementioned Subparagraphs of Paragraph 1 shall be determined by the Presidential Decree.
Article 4 Designation of Critical Information to Be Included in Labeling and Advertising
(1) In case where the failure to include, in the labeling and advertising, product-related information that the Fair Trade Commission (FTC) deems critical to protect consumers and maintain fair trade order may give rise to the following situations, the FTC, after due consideration of the nature of the product and area of trade, may designate by notice such matters to be included in labelling or advertising: Provided, however, that information stipulated to be labelled and advertised in other Decrees shall be excluded.
1. Situation where consumer interests are frequently damaged and remedy of such damage is difficult;
2. Situation where consumers remain unaware of the critical defects or functional limitations of products, and such unawareness has a decisive impact on consumers' purchase decision;
3. other situations where fair trade order is significantly undermined.
(2) The FTC, in placing a notice pursuant to Paragraph 1, shall consult with the heads of relevant agencies and listen to the testimonies at a hearing of the concerned trade association, consumer group, etc. that is officially registered pursuant to Article 19, Paragraph 1 of the Consumer Protection Act (hereinafter referred to as "Consumer Group").
(3) Enterprises, in posting labels or advertisements, shall include the critical information notified by the FTC pursuant to aforementioned paragraph 1.
Article 5 Substantiation of Labels and Advertisements
(1) Enterprises shall be able to substantiate matters related with facts included in their labels and advertisements.
(2) The FTC may request in writing enterprises to submit related documents when it is deemed necessary to have substantiation pursuant to Paragraph 1 for fear of possible violation of Article 3-1 by enterprises, etc.
(3) The requested enterprises pursuant to paragraph 2 shall submit the documents for verification in no less than 30 days after receiving the request: Provided, however, that the FTC may extend the submission deadline if it is deemed justifiable.
(4) When the FTC deems it necessary to keep consumers from getting false ideas about the product or to protect fair trade order, it may allow the general public the access to the documents submitted by requested enterprises, etc. in accordance with paragraph 3 or make such public by due methods: Provided, however, that if such documents contain business confidentiality of the given enterprises, etc., thus their disclosure to the public being feared to damage business of enterprises, etc., this shall not apply.
Article 6 Prohibition of Trade Associations' Restricting labeling and Advertising Activities by Members
(1) Unless set forth otherwise in the Decree, trade associations shall not restrict labeling and advertising of their members: Provided, however, that if the FTC deems it necessary to protect consumer interests or maintain fair trade order, this shall not apply.
(2) The FTC, when permitting trade associations to restrict labeling and advertising activities pursuant to the proviso of paragraph 1, shall seek prior consultation with the heads of related agencies.
(3) The FTC may issue the following corrective measures against violations of paragraph 1:
1. Cease and desist order;
2. Alteration of the articles of incorporation and by-laws which set forth such violations;
3. Other necessary measures to correct the violations.
Article 7 Corrective Measures
(1) In the case where any enterprise, etc. posts undue labels or advertisements in violation of Article 3, paragraph 1, the FTC shall take the following corrective measures against such enterprises, etc.
1. Cease and desist order;
2. Public notification on the fact of law violation;
3. Corrective advertisements;
4. Other measures necessary to correct the violations.
(2) Specifics regarding public notification of the violation and corrective advertisements pursuant to subparagraphs 2 and 3 of paragraph 1 shall be determined by the Presidential Decree.
Article 8 Temporary Cease and Desist Order
(1) The FTC may issue a temporary cease and desist order against enterprises, etc. whose labels or advertisements are-
1. suspected to be in clear violation of Article 3, paragraph 1; or,
2. likely to cause irreparable injury to consumers or rival enterprises, and thus preventive measures are in urgent need.
(2) Consumer groups and other organizations set forth in the Presidential Decree may file a petition with the FTC in writing to issue a temporary cease order against labels and advertisements which are deemed to fall under any subparagraph of paragraph 1.
(3) Any person who is unsatisfied with an order issued pursuant to paragraph 1 may raise an objection to the FTC within 7 days upon receiving the order.
(4) Upon receiving such objection, the FTC shall promptly notify the fact to the Seoul High Court, and the Court shall put this to trial in accordance with the Non-Contentious Case Litigation Procedure Act.
(5) In a trial pursuant to paragraph 4, Article 15 of the Non-Contentious Case Litigation Procedure Act shall not apply.
Article 9 Surcharge
(1) The FTC may impose upon enterprises in violation of Article 3, paragraph 1 surcharges not exceeding 2% of their turnover as set forth in the Presidential Decree (meaning operational profits as for the enterprises set forth in the Presidential Decree. Hereinafter, the same shall apply): Provided, however, that where the violating party does not have sales turnover or is in a difficult situation to settle sales turnover and at the same time it is an enterprise or trade association set forth in the Presidential Decree, the FTC may impose surcharges not exceeding 500 million Won.
(2) The FTC may impose surcharges not exceeding 500 million Won upon trade associations that restricted labeling and advertising of their member enterprises in violation of Article 6, paragraph 1.
(3) In assessing surcharges pursuant to paragraphs 1 and 2, the FTC shall take into account -
1. the nature and degree of the violation;
2. the duration and number of the violation; and
3. the extent of gains arising from the violation.
(4) When the corporation violating Article 3, paragraph 1 is a party to merger, the FTC shall impose and collect surcharges against the violation upon the corporation that is remaining or newly incorporated after merger.