Kim Rahn is the managing editor of The Korea Times. Since joining the company in 2003, she has covered various beats including the presidential office, Seoul city government, the Bank of Korea and the tourism industry. In 2014, she won the Society of Publishers in Asia (SOPA) award for her coverage of the ordeals of migrant women in Korea.
Caffe Bene ordered to pay fine for deceptive ads
By Kim Rahn
It is a deceptive ad if a company asks bloggers to post comments favorable to their products in return for money but do not reveal the payments, a court has ruled.
The Seoul High Court Friday ruled against Caffe Bene, one of the major coffeehouse chains here, which filed the suit against the Fair Trade Commission to annul a 94 million won fine the commission imposed.
In June 2012, Caffe Bene had a marketing agency do viral marketing for the brand, and for Black Smith, an Italian restaurant franchise the company runs.
The agency asked 16 power bloggers to upload new events as well as store introductions and recommendations of Caffe Bene and Black Smith through 2013. In return, it paid them.
The commission discovered it and fined the franchise company.
Caffe Bene claimed the agency was entirely responsible for the viral marketing and the bloggers wrote down the “truth” based on their own experiences, so such postings were not deceptive ads.
But the court said it was an act of deceiving consumers not to make public that the company paid the bloggers for their posts.
“If there is no economic interest involved, it is reasonable for ordinary consumers to trust such information on stores or products on blogs, thinking the postings are based on the bloggers’ honesty,” the court said. “Such postings have huge influence on consumers’ choices. So the ads would disturb the reasonable decision-making of the consumers, and thus hinder fair trade.”