By Jhoo Dong-chan
A court has sided with the country’s antitrust agency against Audi Volkswagen Korea, upholding the agency’s decision to fine the German company for deceptive advertising.
On Friday, the Seoul High Court rejected Audi Volkswagen’s appeal. The company had asked the court to rule against the Fair Trade Commission (FTC), which fined the local unit of the German premium brand 94 million won ($81,000) for allegedly paying famous bloggers to post positive articles about the company’s cars without saying they were advertisements.
According to the court, Audi Volkswagen Korea signed a deal with local advertising agency Ogilvy PR Seoul in June 2010 for the automaker’s online marketing in Korea. Ogilvy PR Seoul then placed an order with “Internet Viral Marketing” company Futurelogy, which engaged its partner, Mirae I&C, for Audi Volkswagen Korea’s online marketing.
Mirae I&C paid 17 famous online bloggers to post positive comments on their websites about Audi’s A6 sedan and R8 sports car, as well as a rock music concert sponsored by Audi Volkswagen Korea. It paid 100,000 won for each post.
The bloggers posted a total of 25 positive articles on their blogs and websites over two months from February 2012 without saying they were paid by the advertising agencies.
In January last, FTC ordered Audi Volkswagen Korea to pay 94 million won for deceptive advertising, because the company did not reveal that the bloggers were paid for the posts that appeared to be personal reviews of the vehicles.
An Audi Volkswagen Korea official claimed viral marketing is not the company’s responsibility and was delegated to advertisement agencies’.
But the court said in its ruling that such online posts could influence auto consumers’ decision-making and the company is responsible for providing proper information for its advertisements.