Regulation Trends and Constitutional Legitimacy of Sanctions Against a Influencer for Inadequate Disclosure of Relationship with Brands
Not disclosing or inadequate disclosing of material relationship between an influencer and an advertiser(brand) when the influencer is paid or provided with any benefit by the advertiser to create contents including endorsement or testimonial could lead to a type of unfair advertising prohibited by the Act on Fair Labeling and Advertising as a deceptive advertising. The Act only contains provisons that impose penalty surcharges on business entity and business entities’ organization and accordingly amendments were proposed which include articles imposing influencers sanction such as penalty surcharges and administrative fine for inadequate disclosure of material relationship with advertisers on their endorsement or testimonial. In this context, a review on constitutional legitimacy of such sanction on an influencer based on international regulation trends is called for. As a new kind of advertisement emerges in which commercial and non-commercial speech are mixed and it is difficult to discern between the two, the ground of more lenient and relaxed judicial review standard the Constitutional Court has been applied to decision on legitimacy of restrictions to commercial advertisement is weakening. Subtle marketing using influencers’ endorsement and testimonial lacking appropriate disclosure of material link to advertisers is also an example of the novel advertising expression. Even if the more lenient approach as well as the original proportionality test is applied, there is little room for constitutional justification of sanctions against individual influencers for inadequate disclosure because the sanctions is more extensive than is necessary to achieve the goal of legislation and the additional burden imposed on individuals is greater than the public interest promoted by the introduction of sanctions. It is also difficult to justify sanctions on individual influencers in terms of the Void for Vagueness doctrine. Rather than introducing sanctions on influencers not disclosing conspicuously, alternatives like means of securing voluntary regulatory compliance(commitments decision), activating civil damages claim and development of contractual provisions influencers should comply with, and use of self-regulatory code of conduct and self-regulatory review board are the solutions which is more constitutionally justifiable and more consistent with regulatory trends for inadequate disclosure in influencers’ endorsement and testimonial.