Advertisements for AI Products and Concentration Enhancers to Face Verification Requirements

Businesses may soon be asked to verify the performance of new technology products, including artificial intelligence (AI), prior to advertising them.

Advertisements using expressions such as "improving concentration and memory" or "harmless ingredients to the human body" may also be required to submit verification data upon the request of the Fair Trade Commission (FTC).

The FTC announced today (September 2) that the revised Notice on the Substantiation of Representations and Advertisements containing these measures will take effect starting tomorrow (September 3).

The representation and advertisement substantiation system requires businesses to secure reasonable grounds regarding the facts claimed in their representations and advertisements, allowing for a swift and objective judgment on whether a representation or advertisement is unfair.

To support this system, the substantiation notice sets forth detailed criteria related to operations, such as the request, review, and processing of substantiation data.

As products and services emphasizing AI performance have been continuously launched recently, the FTC specified that advertisements claiming the use of new technologies like AI will become major targets for substantiation data requests.

In addition, reflecting past deliberation precedents, the FTC stipulated that advertisements using expressions such as "improving concentration and memory," "harmless ingredients to the human body," and "down XX%, feathers XX%" may also become major targets for substantiation data requests.

Businesses that receive a request for substantiation data from the FTC must, in principle, submit the data within 15 days from the date the request was received.

However, the FTC extends the submission deadline when there are force majeure reasons such as natural disasters.

Instead, to ensure that the principle of "substantiation first, advertisement later" is faithfully upheld, the FTC shortened the extension period from "within 30 days from the date the reason for extension ceases to exist" to "within 15 days."

Force majeure reasons that allow for an extension of the submission period were also specified as: ▲ natural disasters ▲ mergers and acquisitions, commencement of rehabilitation procedures, bankruptcy, or the progress of procedures equivalent thereto ▲ seizure or temporary custody of account books and evidentiary documents by a competent authority ▲ occurrence of major obstacles to business operations due to fires or disasters, etc.

Furthermore, the FTC specified that if a business fails to submit substantiation data within the submission period, including the extension period, a suspension order can, in principle, be issued against the relevant advertisement.

This is to clarify that businesses actively promoting their products must secure substantiation data in advance.

Along with this, the FTC has also prepared a checklist for businesses so that they can check the submission period, extension requirements, submission methods, and sanctions for non-submission after receiving a request to submit substantiation data.

An FTC official stated, "Through this revision of the notice, we expect to prevent legal violations by presenting specific self-inspection criteria to businesses," adding, "It will also contribute to effectively preventing consumer damage."
※ Please note: This article was translated by AI and may contain errors.