Companies Must Prove AI Performance Claims Under Revised South Korean Ad Rules

Companies advertising artificial intelligence (AI) capabilities will soon be required to provide evidence to back up their claims, following a revision to South Korea's operating rules on advertising substantiation. The Fair Trade Commission (KFTC) announced the amendment, which aims to protect consumers from misleading advertisements concerning AI technology.

The revised guidelines clarify that prior substantiation is necessary for advertisements promoting new technologies like AI. The substantiation system places the burden of proof on businesses for factual claims made in their advertisements, facilitating quicker judgments on potential violations. The KFTC has also added examples of claims requiring substantiation, such as those related to improved concentration and memory, harmless ingredients, specific material percentages, or performance rankings.

Under the new rules, companies must submit substantiating data within 15 days of a request from the KFTC. Extensions are possible under specific circumstances, including natural disasters, mergers, or legal proceedings that impede data submission. Failure to provide the required evidence within the stipulated period may result in an order to cease the advertisement.

The KFTC has also developed a checklist to help businesses self-assess their substantiation methods and criteria. The commission anticipates that these revised guidelines will proactively prevent violations and effectively safeguard consumers from deceptive advertising practices.

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This revision of the notice will provide concrete standards for preventing violations of the law, thereby contributing to the effective prevention of consumer damage.