Kakao Entertainment gets fined a pittance by FTC for astroturfing social media for ~8 years

The Fair Trade Commission has announced that it will be fining Kakao Entertainment a whopping 390 million won for basically astroturfing social media for eight years, a consequence for a company of their size that I’m sure will be punitive enough to make them think twice about doing it again.

The company promoted its music through social media channels that it either acquired or established, but did not disclose that it owned or operated these accounts. As a result, consumers were not made aware that the promotional posts were paid advertising. From October 2016 to February 2024, 2,353 such posts were identified across 15 social media channels.
Kakao Entertainment also posted music-related content on major online communities without identifying the posters as company employees. Between May 2021 and December 2023, 37 such posts were found on online forums.
In addition, the company paid approximately 860 million won to 35 advertising agencies to promote its content without clearly disclosing the financial relationship. A total of 427 posts were made in this way between July 2016 and December 2023.

As a result, the FTC came to a very obvious conclusion…

The agency said that consumers were likely to mistake these posts for genuine recommendations from ordinary users, rather than advertisements created and funded by the company. It ruled that hiding the economic interests involved undermined the credibility of the content and constituted a deceptive practice under fair advertising law.

…and even though the company did this on purpose and they caught them doing that the punishment was still light.

The agency also noted that Kakao Entertainment was aware of the need to disclose such relationships, based on internal legal reviews, yet continued the violations. The company’s social media accounts involved in the advertising had a combined follower count of over 4.1 million, and the online communities had up to 1.5 million members, suggesting substantial influence on consumer behavior.

On the other hand, this is hilariously somehow the first time the FTC has sanctioned the K-pop industry for deceptive advertising. So I guess this is like the warning shot

This was the investigation where Kakao was also under suspicion of using viral reverse marketing, which is essentially directing hate campaigns against other artists, but an FTC official said there was no evidence of that.

An FTC official stated, “While Kakao Entertainment organized viral marketing to promote its own music, there was no organized effort to target competitors and defame them. We believe there is no evidence of reverse viral marketing, so we only investigated the backdoor advertising aspect and handled the case accordingly.”

Yeah, alright.

Of course, as a cynical fucker, I absolutely have to believe that kind of stuff is happening. Though I will say fandoms are already plenty of annoying, chalking up any criticism to some kind of vast conspiracy, so I’m not looking forward to the discourse somehow getting even worse.

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Anyway, considering Pann, The Qoo, Instiz, and others were all named as sites of manipulation, it seems like even more of a reason to not let those sites represent the opinion of all of Korea like many seem eager to do (especially on social issues, weirdly enough).

Most importantly, it’s a reason to simply form your own opinions on music, much less more important issues. While it’s delusional to assume you are ever immune from propaganda, acknowledging the possibility of it swaying the so-called general public consensus viewpoint is an important first step toward combating schemes like this.