South Korean Telcos Fined for False 5G Advertising Claims: What You Need to Know

South Korea is one of the leading countries in the development and deployment of 5G networks. However, the excitement surrounding the new technology has led some telcos to make exaggerated claims regarding their 5G capabilities. In November 2019, the Korean Fair Trade Commission (KFTC) imposed fines on three major South Korean telecom companies – SK Telecom, KT Corp, and LG U+ – for making misleading 5G advertising claims. This article discusses the KFTC’s ruling, its impact on the 5G market, and the lessons that can be learned from it.

The Korean Fair Trade Commission Fines SK Telecom, KT Corp and LG U+ for Inflated 5G Claims

In its ruling, the KFTC fined SK Telecom, KT Corp, and LG U+ a total of KRW 9.9 billion (approximately USD 8.5 million) for exaggerating their 5G network speeds and coverage. The KFTC found that the telcos’ advertisements misled customers into believing that subscribers would experience faster and more stable 5G service than was actually available. The telcos were also accused of falsely claiming that their 5G networks covered wider areas than they actually did. In response to the KFTC’s ruling, the telcos apologized and promised to improve their advertising practices.

Misleading 5G Advertising: A Common Industry Practice or a South Korean Phenomenon?

Misleading advertising is not unique to South Korea’s telco industry. In fact, regulators in other countries have also cracked down on false advertising claims related to 5G networks. For example, in the UK, the Advertising Standards Authority (ASA) banned an advertisement by Three UK that claimed “If it’s not Three, it’s not real 5G”. Similarly, in the US, the National Advertising Division (NAD) recommended that AT&T discontinue its “5G Evolution” advertising campaign, which used the term “5G” to describe its 4G LTE network. However, the fines imposed on South Korean telcos are among the highest in the world and have set a precedent for other countries in terms of cracking down on false 5G advertising claims.

The Impact of the Fines on South Korean Telcos and the 5G Market

The fines imposed by the KFTC are relatively small in comparison to the revenue of the telcos. However, the reputational damage caused by the ruling could have a bigger impact on the industry. South Korea’s telcos have been investing heavily in 5G infrastructure and marketing to maintain their position as leaders in the global 5G market. The KFTC’s ruling could undermine public trust in the telcos and create an opportunity for competitors to gain market share. Additionally, the ruling could encourage other regulators to take a harder stance on false advertising claims related to 5G networks, which could affect the industry as a whole.

Lessons Learned from South Korea’s Crackdown on False 5G Advertising

The KFTC’s ruling highlights the importance of transparency and accuracy in advertising, especially in emerging technologies such as 5G. Telcos should be cautious about making exaggerated claims about their 5G capabilities and ensure that their advertising is based on factual information. Regulators should also continue to monitor the industry closely to prevent false advertising and protect consumers from misleading claims. Finally, the ruling serves as a reminder to consumers to be skeptical of marketing claims and do their own research before making purchasing decisions.