Baek Byung-yeul is a journalist at The Korea Times focused on cultural content, including films and cultural events in South Korea. You can contact him at baekby@koreatimes.co.kr to share your insights.
Toyota Korea fined 817 mil. won for false advertising
Toyota RAV4 SUV / Courtesy of Toyota Motor Korea
By Baek Byung-yeul
By Baek Byung-yeul
Toyota Motor Korea CEO Nobuyuki Takemura
Korea's antitrust agency has imposed an 817 million won ($729,307) fine on Toyota Motor Korea saying the Korean unit of the Japanese auto giant made deceptive ads about the safety of its RAV4 SUV.
The Fair Trade Commission (FTC) said Tuesday that Toyota falsely advertised in car brochures and press releases since October 2014 that the U.S. Insurance Institute for Highway Safety (IIHS) chose its RAV4 SUVs as a top safety pick in 2015.
However, the FTC said the Korean unit concealed the fact that there are differences between the RAV4 SUVs sold here and in the U.S. because the Korean model doesn't have shock absorber brackets.
“It could mislead consumers to believe that vehicles sold in Korea also have the same safety features. Those advertising acts are likely to damage consumers' conduct or decisions with regard to the product,” the FTC said.
The IIHS is a nonprofit organization and has given the top safety pick rate to the best-performing cars annually. To qualify for the top safety pick, vehicles must earn “good” ratings on four out of five crash tests and at least one “acceptable” rating.
The RAV4's 2014 model couldn't qualify for the top safety pick as it didn't feature the shock absorber bracket but the 2015 and 2016 models equipped with the brackets received the top safety picks.
“Toyota Motor Korea insisted it inserted wording in the catalogue with a disclaimer that the text and photos in the catalogue may be different from the imported model. However this does not have a direct relation to the ads,” the FTC said.
“Even though the condition is stipulated in the catalogue, Toyota Motor Korea cannot be exempted from responsibility of illegal acts that could mislead consumers.”
The commission also considered the fact that Toyota Motor's other overseas branches, which have sold the RAV4 vehicles that are not equipped with the shock absorber brackets, haven't advertised the IIHS choosing the SUV as its top safety pick.
Given the safety of vehicles is directly related to people's life and health, the FTC said it will keep taking strict measures against deceptive advertising.
In response, Toyota Motor Korea said it has not received any related documents from the FTC and so could not comment on the issue.
“We have not received any documents from the FTC yet. However, Toyota Motor Korea is trying to comply with the law here and we will cooperate fully with the FTC,” a Toyota Korea spokesman said. “As soon as we receive the documents, we will review them and make a public announcement.”