2020 Korean YouTube backdoor advertising controversy

The 2020 Korean YouTube backdoor advertising controversy refers to the practice of undisclosed or 'backdoor' advertising by Korean YouTubers and internet celebrities, involving the promotion of products without the disclosure of a paid partnership with the suppliers of these products. The discovery of this practice led to widespread controversy and the eventual involvement of the South Korean Fair Trade Commission, which imposed strict regulations on social media providers in a major crackdown. The incident also prompted calls for similar regulation in other countries, such as the United States and Japan.

Beginning of the controversy

Kang Min-kyung at Incheon International Airport

On 15 July 2020, Dispatch, a Korean media organisation, reported that prominent Korean internet celebrities such as Han Hea-youn [ko] and Kang Min-kyung were involved in the process of undisclosed or 'backdoor' advertising, where products were promoted without the disclosure of a paid partnership.[1] Kang Min-kyung was revealed to have been promoting products worth tens of thousands of dollars in videos without revealing that these videos were sponsored.[2] Both figures later publicly apologised for their actions[3][4] following major controversy.[5]

Subsequently, other prominent figures such as YouTuber 'Charm PD' (참피디) also revealed their involvement in this practice. The latter would also publicly reveal that several other prominent Korean YouTubers were similarly involved, which served to greatly increase the scale of the controversy.[6][7]

Impact on YouTubers

YouTubers such as mukbang food reviewers Tzuyang (쯔양), Embro (엠브로), Moon Bok-hee (문복희), and Hamji (햄지) publicly apologised for their actions by admitting to their use of undisclosed advertising.[8] However, this failed to improve public opinion, and led to significant losses in popularity among those involved,[9] with one YouTuber losing 96% of their viewership in a month.[10] Some YouTubers stopped uploading videos altogether, and announced their retirement from YouTube as a result of the controversy.[11]

The growing scale of the controversy led to the official involvement of the South Korean Fair Trade Commission (FTC).[12] On August 24 2020, Chairman of the FTC Cho Seong-wook met with prominent individuals and internet celebrities at the Chamber of Commerce and Industry in the Jung District of Seoul, which resulted in the implementation of strict regulations on social media platforms (including YouTube) in order to crack down on the practice of 'backdoor' advertising.[13][14] These regulations did not immediately come into effect, but were instead enforced after a certain period of time, in order to allow affected individuals time to comply.[15]

The regulations required internet celebrities to clearly disclose instances of advertising and paid sponsorships as well as associated payments, and prohibited ambiguous phrases such as 'experience group' and 'thanks to'. Contravention of these regulations would be met by significant legal and financial penalties, including up to two years in prison and fines of up to 150 million won. Although these laws were typically applied to business owners, internet celebrities were considered as such and were therefore subject to the same treatment under South Korean law.[15][13][14]

Impact on other countries

The strict response by the South Korean FTC prompted calls for similar measures abroad, with the Federal Trade Commission of the United States issuing a statement in February 2021 calling for the implementation of similar regulations.[16] Legislative bodies in Japan and France passed similar measures, with offenders in France facing penalties of up to two years in prison and fines of up to 300,000 euros.[17][18]

References

  1. ^ 김지호; 송수민 (2020-07-15). "[단독] "내돈내산? 남돈내산!"…강민경·한혜연, 유튜브 장사의 실체" [[Exclusive] "I gave my money and I bought it? Like I bought it with other money!"... Kang Min-kyung and Han Hye-yeon, the reality of YouTube business.]. 디스패치 (in Korean). Archived from the original on 2020-07-22. Retrieved 2020-10-28.
  2. ^ 한상범 (2020-08-19). "'대국민 사기극' 뒷광고의 세계" [The world of the back advertisement for "People's Scam"]. 일요시사 (in Korean). Archived from the original on 2020-09-18. Retrieved 2020-09-28.
  3. ^ 최보란 (2020-07-17). "한혜연, 고개 숙여 사과 "혼란 드려 죄송...질타 마음에 새기겠다"(공식)" [Han Hye-yeon bows his head and apologizes "Sorry for the confusion... I'll keep it in mind for criticism" (Official)]. YTN (in Korean). Archived from the original on 2020-09-17. Retrieved 2020-09-29.
  4. ^ "강민경, PPL 논란 사과 | 보그 코리아 (Vogue Korea)" [Kang Min-kyung, PPL apologizes for controversy.]. Vogue Korea (in Korean). 2020-07-17. Archived from the original on 2020-08-06. Retrieved 2020-09-29.
  5. ^ 고재완 (2020-07-16). "'내돈내산'의 역습…강민경X한혜연 PPL논란→비난으로 끝내선 안되는 이유" [Kang Min-kyung X Han Hye-yeon PPL controversy → The reason why criticism should not end]. Sports Chosun (in Korean). Archived from the original on 2021-11-01. Retrieved 2020-11-02.
  6. ^ 김민지 (2020-08-08). "유튜브 뒷광고가 도대체 뭐길래?" [What is the YouTube back ad?]. 헤럴드경제 (in Korean). Archived from the original on 2020-08-10. Retrieved 2020-11-02.
  7. ^ 김현덕 (2020-07-21). ""참PD 입니다. 유튜버 광고 생태계에 대해 폭로하겠습니다"" [This is Charm PD. I will expose the YouTube advertising system.]. 위키트리 (in Korean). Retrieved 2020-09-28.
  8. ^ 김, 자아 (2020-08-05). "참피디 '뒷광고 폭로'에…수백만 유튜버들 줄줄이 '사과'" [Charm PD's 'back advertisement exposure'... Millions of YouTubers line up'Apologized']. Money Today (in Korean). Archived from the original on 2020-08-09. Retrieved 2020-09-29.
  9. ^ 정, 지원 (5 August 2020). ""믿을 놈 하나 없네" 문복희,나름,쯔양,상윤쓰, 뒷광고 논란에 '여론 철퇴'" ["There is no one to believe" 'criticism of public opinion' in controversy behind advertisement]. joynews24 (in Korean). Archived from the original on 2020-10-27. Retrieved 2020-09-29.
  10. ^ 노, 윤주. "구독자·조회수 급락한 유튜버들…9월부터 뒷광고 사라질까?" [YouTubers who have plunged in subscribers and views... Will back advertisements disappear from September?]. Decenter (in Korean). Retrieved 2020-09-29.
  11. ^ 성, 소의 (14 August 2020). "꺼지지 않는 '뒷광고' 논란... 업계 떠나는 유튜버들" [Controversy about'back advertisement' that never ends... YouTubers leaving the industry]. 폴리뉴스 (in Korean). Retrieved 2020-11-04.
  12. ^ 윤, 지혜 (2020-09-24). "인플루언서, 공정위 만나 '뒷광고' 근절 약속" [Influencer meets Fair Trade Commission and promises to eradicate 'back advertisements']. inews24 (in Korean). Archived from the original on 2020-10-14. Retrieved 2020-11-04.
  13. ^ a b 강, 종민 (2020-09-24). "'뒷광고' 논란 후 유튜버 만난 조성욱 "적응 기간 이후 법 엄정 집행"" [Jo Sung-wook meets YouTuber after'back advertisement' controversy "Strict law enforcement after adaptation period"]. Newsis (in Korean). Retrieved 2020-09-29.
  14. ^ a b 이, 요훈 (2020-09-28). "유튜브 뒤흔든 '뒷광고'…"앞으로 유료 광고 정확히 표기"" [YouTube'back advertisement' controversy... "In the future, paid advertisements are accurately marked"]. YTN 사이언스 (in Korean). Retrieved 2020-09-29.
  15. ^ a b 차, 지연 (2020-08-12). "9월부터 유튜브 '뒷광고' 금지…공정위 "계도기간 후 처벌"" [YouTube'back advertisement' banned from September... Fair Trade Commission "penalties after the transition period"]. Yonhap News Agency (in Korean). Archived from the original on 2020-08-12. Retrieved 2020-11-04.
  16. ^ 하, 선영; 장, 주영 (2020-08-13). "'뒷광고' 유튜버만 잘못? 미국, 플랫폼도 처벌 추진" [Only'back advertisement' YouTubers are wrong? U.S. platforms also push for penalties]. JoongAng Ilbo (in Korean). Archived from the original on 2020-08-12. Retrieved 2020-10-29.
  17. ^ 박, 광연 (2020-08-11). "유튜브 '뒷광고' 뿌리 뽑기…자진 시정 우선, 규제 입법 추진" [Rooting YouTube'back advertisements'... Prioritize voluntary correction, promote regulatory legislation]. Kyunghyang Shinmun (in Korean). Retrieved 2020-10-29.
  18. ^ 고, 은이 (2020-08-28). "규제 사각지대 '뒷광고' 논란" [Controversy over regulatory blind spot'back advertisement']. 한국경제 (in Korean). Archived from the original on 2020-08-28. Retrieved 2020-10-29.