CHAPTER I GENERAL PROVISIONS
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| Article 1 (Purpose) |
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The purpose of this Act is to prevent unfair labels and advertisements for products and services which may deceive or mislead consumers in labeling and advertising, and to promote provision of correct and useful information to consumers, thereby establishing order in fair trade and protecting consumers.
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 2 (Definitions) |
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The definitions of terms used in this Act shall be as follows:
| 1. |
The term "label" means characters or figures written on or attached to containers or packages of products (including attachments and contents), bulletins in places of business or certificates specifying rights to products, etc., such as gift certificates, membership cards and purchase rights, and containers or packages indicating characteristics of products, in order that business entities or business entities' organizations (hereinafter referred to as "business entities, etc.") may inform consumers of any of the following matters concerning products or services (hereinafter referred to as "products, etc."): |
| (a) |
Matters on the relevant business entities or other business entities, etc.; |
| (b) |
Matters on details, terms of transactions and other matters concerning transactions of products, etc. of the relevant business entities or other business entities, etc.; |
| 5. |
The term "consumer" means a person who uses products produced or provided by business entities, etc. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
CHAPTER II PROHIBITION, ETC. AGAINST UNFAIR LABELING OR ADVERTISING
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| Article 3 (Prohibition, etc. against Unfair Labeling or Advertising) |
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| (1) |
No business entity, etc. shall place any of the following labeling or advertising that may undermine order in fair trade by deceiving or misleading consumers, or compel other business entities to do so: |
| 1. |
False or exaggerated labeling or advertising; |
| 2. |
Deceptive labeling or advertising; |
| 3. |
Unfairly comparative labeling or advertising; |
| 4. |
Slanderous labeling or advertising. |
| (2) |
Detailed concerning labeling or advertising referred to in each subparagraph of paragraph (1) shall be prescribed by Presidential Decree. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 4 (Announcement of Critical Information and Integrated Notification) |
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| (1) |
The Fair Trade Commission may provide public notice about matters that business entities, etc. shall include in labeling or advertising (hereinafter referred to as "critical information") and the methods of labeling or advertising (including online labeling or advertising; hereinafter the same shall apply), where any of the following matters is required for protecting consumers or maintaining order in fair trade, in consideration of characteristics of products, etc. or fields of trade: Provided, That matters prescribed to be labeled or advertised by other statutes shall be excluded herefrom: |
| 1. |
Matters, the omission of which in labels or advertisements often causes damage to consumers; |
| 2. |
Matters, the omission of which in labels or advertisements is likely to lead to any of the following situations: |
| (a) |
Where consumers' inaccurate knowledge of critical defects or functional limits of products, etc. has a decisive influence on their decision to purchase products, etc.; |
| (b) |
Where lives, bodies or property of consumers are likely to be jeopardized or injured; |
| (c) |
When consumers' rational choices are substantially interrupted, or order in fair trade is likely to be substantially undermined. |
| (2) |
Where the Fair Trade Commission intends to provide public notice under paragraph (1), it shall consult in advance with the heads of the relevant administrative agencies. In such cases, the Fair Trade Commission may hold a public hearing to hear opinions of business entities' organizations, consumer organizations registered under Article 29 of the Framework Act on Consumers (hereinafter referred to as "consumer organizations"), or other interested parties, when deemed necessary. |
| (3) |
In providing public notice on critical information, the Fair Trade Commission may give integrated notification on matters prescribed to be included in labels or in advertisements and matters restricted or prohibited in labels or in advertisements by other statutes (hereinafter referred to as "integrated notification") in order to provide comprehensive information to interested parties, including consumers and business entities. |
| (4) |
Where a statute concerning matters subject to integrated notification has been enacted or amended, the heads of the relevant administrative agencies shall report it to the Fair Trade Commission before the enforcement date of such statute to ensure that integrated notification on such matters is given. |
| (5) |
Where business entities, etc. place labeling or advertising, they shall include critical information announced under paragraph (1) in such labeling or advertising. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 4-2 Deleted. <by Act No. 10167, Mar. 22, 2010> |
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| Article 5 (Verification, etc. of Details of Labels and Advertisements) |
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| (1) |
Business entities, etc. shall be able to verify matters concerning facts included in labels or advertisements they have placed. |
| (2) |
Where business entities, etc are likely to violate Article 3 (1) and verification prescribed in paragraph (1) is deemed necessary, the Fair Trade Commission may request relevant data from the relevant business entities, etc. upon specifying details of the request. |
| (3) |
Business entities, etc. in receipt of a request to submit data necessary for verification pursuant to paragraph (2) shall submit the data, within 15 days after receipt of such request, to the Fair Trade Commission: Provided, That the Fair Trade Commission may extend a period for submission, when any justifiable ground exists. |
| (4) |
The Fair Trade Commission may keep the verification data submitted by business entities, etc. under paragraph (3) and make it available for public perusal or disclose it to the public in other appropriate means if it is deemed necessary to prevent consumers from being misled about products or to maintain order in fair trade: Provided, That this shall not apply where such data is business secrets of business entities, etc. and is likely to disturb business activities of such business entities, etc. if disclosed to the public. |
| (5) |
When business entities, etc. in receipt of a request to submit verification data pursuant to paragraph (2) continue placing labeling or advertising without submitting such data within a period for submission referred to in paragraph (3), the Fair Trade Commission may order business entities, etc. to suspend placing labeling or advertising until they submit the verification data. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 6 (Prohibition against Restrictions on Labeling or Advertising by Business Entities' Organizations) |
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| (1) |
Any business entities' organization shall not restrict labeling or advertising of business entities who belong to the relevant business entities' organization, except as otherwise provided by statutes: Provided, That this shall not apply where the Fair Trade Commission deems it necessary for protecting the interests of consumers and maintaining order in fair trade. |
| (2) |
When the Fair Trade Commission intends to approve restrictions on labeling or advertising placed by business entities' organization pursuant to the proviso to paragraph (1), it shall consult in advance with the heads of the relevant administrative agencies. |
| (3) |
The Fair Trade Commission may issue orders to take any of the following measures when business entities' organizations violate the main sentence of paragraph (1): |
| 1. |
Suspension of the relevant violation; |
| 2. |
Revision of articles of association or regulations prescribing the relevant violation; |
| 3. |
Other measures necessary for correcting violations. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 7 (Corrective Measures) |
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| (1) |
Where business entities, etc. engage in unfair labeling or advertising in violation of Article 3 (1), the Fair Trade Commission may issue any of the following measures to the relevant business entities, etc. to correct such violation: |
| 1. |
Suspension of the relevant violation; |
| 2. |
Publication of the fact that a corrective order has been issued to the relevant business entities, etc.; |
| 3. |
Corrected advertising; |
| 4. |
Other measures necessary for correcting violations. |
| (2) |
Matters necessary for publishing the fact that a corrective order has been issued to business entities, etc. and for corrected advertising pursuant to paragraph (1) 2 and 3 shall be prescribed by Presidential Decree. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 8 (Temporary Suspension Orders) |
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| (1) |
The Fair Trade Commission may order business entities, etc. to temporarily suspend labeling or advertising, when such labeling or advertising fall under both of the following subparagraphs: |
| 1. |
Where the relevant labeling or advertising is obviously suspected to violate Article 3 (1); |
| 2. |
Where the relevant labeling or advertising is likely to cause irrecoverable damage to consumers or rival business entities, and thus prevention of such damage is deemed urgently required. |
| (2) |
Where labeling or advertising by business entities, etc. is deemed to fall under both subparagraphs of paragraph (1), consumer organizations and other agencies or organizations prescribed by Presidential Decree may request the Fair Trade Commission to issue an order to temporarily suspend labeling or advertising thereof in writing (including electronic documents). |
| (3) |
A person who protests against an order issued under paragraph (1) may file an objection to the Fair Trade Commission within seven days after receipt of such order. |
| (4) |
If a person subject to an order issued under paragraph (1) files an objection under paragraph (3), the Fair Trade Commission shall, without delay, notify the Seoul High Court of such fact, and the Seoul High Court, in turn, shall proceed to a trial in accordance with the Non-Contentious Case Procedure Act. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 9 (Penalty Surcharges) |
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| (1) |
The Fair Trade Commission may impose penalty surcharges on business entities, etc. who have placed labeling or advertising in violation of Article 3 (1), up to the amount of sales prescribed by Presidential Decree (referring to operating profits in cases of business entities prescribed by Presidential Decree: hereinafter the same shall apply) multiplied by 2/100: Provided, That it may impose penalty surcharges up to 500 million won on business entities, etc. prescribed by Presidential Decree, when the relevant violator has no sales or it is impractical to calculate the amount of sales. |
| (2) |
The Fair Trade Commission may impose penalty surcharges up to 500 million won on business entities' organizations which have restricted labeling or advertising by business entities, etc. in violation of the main sentence of Article 6 (1). |
| (3) |
The Fair Trade Commission shall take into account of the followings when it imposes penalty surcharges pursuant to paragraph (1) or (2): |
| 1. |
Details and degree of a violation; |
| 2. |
Duration and frequency of a violation; |
| 3. |
Scale of profits generated from a violation; |
| 4. |
Degree of effort by business entities, etc. to prevent damage sustained by consumers and to compensate for such damage for consumers. |
| (4) |
When a corporate business entity which has violated Article 3 (1) merges with another corporation, penalty surcharges shall be imposed and collected by deeming that a violation committed by the corporate business entity is committed by a corporation surviving the merger or established in the course of such merger. |
| (5) |
Criteria for imposition of penalty surcharges under paragraph (1) or (2) shall be prescribed by Presidential Decree. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
CHAPTER III COMPENSATION FOR DAMAGE
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| Article 10 (Obligation to Compensate for Damage) |
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| (1) |
Where any person has suffered damage from unfair labeling or advertising which violates Article 3 (1), business entities, etc. shall be obligated to compensate for such damage to the sufferer. |
| (2) |
No business entities, etc. obligated to compensate for damage pursuant to paragraph (1) shall be exempted from such obligation, by citing that damage has not been caused intentionally or by negligence. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 11 (Recognition of Damages) |
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Where it is recognized that damage is caused by the act of violating Article 3 (1), but it is impracticable to verify the damages in light of the character of the case, the court may recognize reasonable damages based on the gist of the entire arguments and the outcome of investigating evidence.
[This Article Wholly Amended by Act No. 12096, Aug. 13, 2013]
CHAPTER IV SUPPLEMENTARY PROVISIONS
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| Article 12 (Duty of Confidentiality) |
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Any commissioner of the Fair Trade Commission who has performed or performs duties prescribed in this Act, public official, executive officer or employee of the Korea Consumer Agency established under Article 33 of the Framework Act on Consumers (hereinafter referred to as the “Korea Consumer Agency”) who has participated in the investigation of violations under Article 16-2, and person who held such position shall neither divulge any confidential information on business entities, etc., known to him/her in the course of performing his/her duties, nor use such information for any purpose other than for the enforcement of this Act. <Amended by Act No. 12096, Aug. 13, 2013>
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 13 (Consultation on Enactment, etc. of Statutes Related to Restrictions, etc. on Labeling or Advertising) |
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When the heads of the related administrative agencies intend to enact or amend statutes which stipulate restrictions on labeling or advertising by business entities, etc. or imposition of the duty to place labeling or advertising on business entities, etc., they shall consult in advance with the Fair Trade Commission.
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 14 (Voluntary Regulations concerning Labeling or Advertising) |
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| (1) |
Business entities, etc. may voluntarily determine regulations, standards, etc. concerning labeling or advertising (hereinafter referred to as "voluntary regulations") to prevent violations of Article 3 (1). |
| (2) |
Voluntary regulations shall be appropriate for preventing violations of Article 3 (1), and shall not restrict labeling or advertising placed by business entities, etc. and information provided to consumers, without justifiable grounds. |
| (3) |
Business entities, etc. may request the Fair Trade Commission to examine whether voluntary regulations determined under paragraph (1) violate Article 3 (1). |
| (4) |
The Fair Trade Commission in receipt of a request to examine voluntary regulations under paragraph (3) shall notify the applicants of the results of the examination within 60 days of receipt of such request. |
| (5) |
Where voluntary regulations violate paragraph (2), the Fair Trade Commission may order business entities, etc. to make a correction thereof. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 14-2 (Voluntary Review Organizations, etc. on Labels or Advertisements) |
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| (1) |
A person who operates an organization aimed at preventing unfair labeling or advertising (hereinafter referred to as "voluntary review organization, etc."), including deliberations (referring to determination as to whether labeling or advertising violate statutes or voluntary regulations, regardless of the title; hereinafter the same shall apply) on whether labeling or advertising by business entities, etc. violate Article 3 (1) or voluntary regulations, may report thereon to the Fair Trade Commission, as prescribed by Presidential Decree. |
| (2) |
A voluntary review organization, etc. shall make determinations in accordance with Article 3 (1) or voluntary regulations, in deliberating on labeling or advertising, and shall restrict labeling or advertising by business entities, etc. or information provided to consumers without justifiable grounds. |
| (3) |
The Fair Trade Commission may request data on details, results, etc. of deliberation from a voluntary review organization, etc. |
| (4) |
Where details, results, etc. of deliberation by a voluntary review organization, etc. violate paragraph (2), the Fair Trade Commission may request correction thereof, and the voluntary review organization, etc. shall comply with such request except in extenuating circumstances. |
| (5) |
Where the Fair Trade Commission determines that labeling or advertising is subject to deliberation by a voluntary review organization, etc., it may request a voluntary review organization, etc. to deliberate on such labeling or advertising. |
| (6) |
The Fair Trade Commission shall not order business entities, etc. to take corrective measures prescribed in Article 7 when business entities, etc. have corrected unfair labeling or advertising in accordance with the results of deliberation by a voluntary review organization, etc. on labeling or advertising subject to deliberation, which has been requested by the Fair Trade Commission pursuant to paragraph (5): Provided, That this shall not apply where violations of this Act are repeated or corrective measures of the voluntary review organization, etc. are deemed impractical to prevent damage to consumers or rival business entities, even when business entities, etc. have taken corrective measures in accordance with the results of deliberation by the voluntary review organization, etc. |
| (7) |
When a voluntary review organization, etc. (including a voluntary review organization of business entities' organizations recognized by the Fair Trade Commission under the proviso to Article 6 (1), and deliberation agencies, to which deliberation has been delegated by other statutes) which has reported pursuant to paragraph (1) deliberate on labeling or advertising, which has been requested by the Fair Trade Commission under paragraph (5), the Fair Trade Commission may subsidize expenses incurred therein within budgetary limits. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 15 (Cooperation from Heads of Relevant Agencies, etc.) |
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| (1) |
The Fair Trade Commission may hear opinions from the heads of the relevant administrative agencies or other agencies and organizations if deemed necessary for the enforcement of this Act. |
| (2) |
The Fair Trade Commission may request the heads of the relevant administrative agencies or other agencies and organizations to conduct necessary investigations or submit necessary data if deemed necessary for the enforcement of this Act. |
| (3) |
The Fair Trade Commission may request necessary cooperation from the heads of the relevant administrative agencies or other agencies and organizations if deemed necessary for ensuring that business entities, etc. comply with orders issued under Article 6 (3) or 7 (1). |
| (4) |
Where the Fair Trade Commission finds justifiable grounds to conduct an ex officio investigation deeming that finance or insurance business entities, etc. have violated Article 3 (1), it shall notify the Financial Services Commission of such violation so that the Financial Services Commission deals with it, instead of conducting such investigation. |
| (5) |
The Financial Services Commission, upon being notified under paragraph (4), shall deal with such notification in good faith in accordance with finance- or insurance-related statutes, and inform the Fair Trade Commission of results thereof. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 16 (Application Mutatis Mutandis of the Monopoly Regulation and Fair Trade Act) |
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| (1) |
Articles 42, 43, 43-2, 44, 45, and 52 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to duties of the Fair Trade Commission pursuant to this Act, and Articles 53, 53-2, 54, 55 and 55-2 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to filing objections and instituting litigation against dispositions by the Fair Trade Commission under this Act (excluding temporary suspension orders issued under Article 8 (1)), exclusive jurisdiction over an action of appeal, and handling cases. |
| (2) |
Article 49 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to recognition of, reporting, etc., on violations of this Act, and Article 50 (1) through (4) and Articles 50-2, 50-3, and 51 of the Monopoly Regulation and Fair Trade Act shall apply mutatis mutandis to investigations by the Fair Trade Commission, hearing of opinions, and recommendation for correction, etc. <Amended by Act No. 12096, Aug. 13, 2013> |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 16-2 (Investigations of Violations) |
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| (1) |
If deemed necessary to conduct an investigation under Article 16 (2), the Fair Trade Commission may organize a joint investigation team with the Korea Consumer Agency. In such cases, the organization of the investigation team, the detailed method and procedures for the investigation, and other necessary matters shall be prescribed by Presidential Decree. |
| (2) |
The Fair Trade Commission may provide allowances or travel expenses, within the budget, for executive officers and employees of the Korea Consumer Agency who participate in the investigation referred to in paragraph (1). |
| (3) |
Executive officers and employees of the Korea Consumer Agency who perform the relevant affairs under paragraph (1) shall be deemed to be a public official in applying penalty provisions under Articles 129 through 132 of the Criminal Act. |
[This Article Newly Inserted by Act No. 12096, Aug. 13, 2013]
CHAPTER V PENALTY PROVISIONS
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| Article 17 (Penalty Provisions) |
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Any person who falls under any of the following subparagraphs shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding 150 million won:
| 1. |
A business entity, etc. who places unfair labeling or advertising in violation of Article 3 (1), or who compels other business entities, etc. to do so; |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 18 (Penalty Provisions) |
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Any person who divulges any confidential information of business entities, etc. known to him/her in the course of performing his/her duties, or uses such information for any purposes other than for the enforcement of this Act, in violation of Article 12, shall be punished by imprisonment with labor for not more than two years or by a fine not exceeding five million won.
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
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| Article 19 (Joint Penalty Provisions) |
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If the representative of a corporation (including organizations without legal personality; hereafter the same shall apply in this Article), or an agent, employee or other servant of the corporation or an individual commits an offence under Article 17 in connection with the business of the corporation or the individual, not only shall such offender be punished, but also the corporation or the individual shall be punished by a fine under the relevant Article: Provided
, That this shall not apply where such corporation or the individual has not been negligent in giving due attention and supervision concerning the relevant duties to prevent such offence.
[This Article Wholly Amended by Act No. 10167, Mar. 22, 2010]
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| Article 20 (Administrative Fines) |
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| (1) |
Where business entities, etc. fall under any of the following cases (excluding subparagraph 5), such entities shall be punished by an administrative fine not exceeding 100 million won, and where business entities, etc. fall under subparagraph 5, such entities shall be punished by an administrative fine not exceeding 30 million won, and any executive officer, employee or other interested person of a corporation or business entities' organization fall under any of the following cases, he/she shall be punished by an administrative fine not exceeding 10 million won: |
| 1. |
Where a business entity or a person fails to include announced critical information in labeling or advertising in violation of Article 4 (5); |
| 2. |
Where a business entity or a person fails to submit verification data in violation of Article 5 (3); |
| 3. |
Where a business entity or a person fails to suspend labeling or advertising in violation of Article 5 (5); |
| 4. |
Where a business entity or a person fails to comply with a temporary suspension order, in violation of Article 8 (1); |
| 5. |
Where a business entity or a person fails to comply with an order to take corrective measures in violation of Article 14 (5); |
| (3) |
Administrative fines under paragraph (1) or (2) shall be imposed and collected by the Fair Trade Commission, as prescribed by Presidential Decree. |
[This Article Wholly Amended by Act No. 11050, Sep. 15, 2011]
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on July 1, 1999.
Article 2 (Transitional Measures concerning Corrective Measures, Penalty Surcharges and Penalty Provisions)
Taking corrective measures, imposing penalty surcharges and applying penalty provisions to any violation of Articles 23 (1) 6 and 26 (1) 5 of the former Monopoly Regulation and Fair Trade Act before this Act enters into force shall be governed by former provisions.
Article 3 (Transitional Measures concerning Fair Competition Regulations)
Fair competition regulations about labeling or advertising deliberated upon by the Fair Trade Commission under Article 23 (4) and (5) of the former Monopoly Regulation and Fair Trade Act as at the time this Act enters into force shall be deemed voluntary regulations about labeling or advertising deliberated upon under Article 14.
Article 4 Omitted.
Article 5 (Relationship with other Statutes)
A citation of the former Monopoly Regulation and Fair Trade Act or provisions thereof in force as at the time this Act enters into force shall be deemed a citation of this Act or the corresponding provisions hereof in lieu of the former provisions, if such corresponding provision exists herein.
ADDENDA <Act No. 7315, Dec. 31, 2004>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 2005. (Proviso Omitted.)
Articles 2 through 10 Omitted.
ADDENDA <Act No. 7794, Dec. 29, 2005>
| (1) |
(Enforcement Date) This Act shall enter into force three months after the date of its promulgation. |
| (2) |
(Applicability to Period for Submission of Verification Data) The amended provisions of Article 5 (3) and (5) shall apply from the first labeling or advertising placed by business entities, etc. after this Act enters into force. |
ADDENDA <Act No. 7988, Sep. 27, 2006>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDA <Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 7 Omitted.
ADDENDA <Act No. 8863, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 9785, Jul. 31, 2009>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Articles 2 through 9 Omitted.
ADDENDUM <Act No. 10167, Mar. 22, 2010>
This Act shall enter into force on the date of its promulgation.
ADDENDUM <Act No. 11050, Sep. 15, 2011>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 12096, Aug. 13, 2013>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided
, That the amended provisions of Articles 12 and 16-2 shall enter into force three months after the date of its promulgation.
Article 2 (Transitional Measures concerning Right to Claim Compensation for Damage)
In applying provisions of the right to claim compensation for damage, the former provisions shall apply to any labeling or advertising placed before this Act enters into force, notwithstanding the amended provisions of Article 11.
