Influencer Marketing in Korea for Foreign Brands: Disclosure Rules Under the Fair Labeling and Advertising Act

Influencers on Instagram, YouTube, Naver Blog, and TikTok are central to how foreign brands launch in Korea, especially in beauty, food, fashion, and consumer electronics. Korea regulates this marketing closely. Since the “undisclosed advertising” scandals of 2020, the Korea Fair Trade Commission (KFTC) has required clear disclosure of any economic relationship between a brand and an influencer, in a specific way and in a specific place. The brand, not just the influencer, carries the legal risk. In 2026 the rules were extended to AI-generated virtual influencers. This article explains what foreign brands need to know before launching a campaign.

1. The Legal Framework

• The Act on Fair Labeling and Advertising prohibits false, exaggerated, deceptive, and unfairly comparative advertising.
• The KFTC’s Guidelines on Endorsement and Testimonial Advertising explain how the Act applies to endorsements, including influencer content. Under the Guidelines, failing to disclose an economic relationship between an advertiser and an endorser can make the content a deceptive advertisement.
• The KFTC has also published a practical guide with Q&A and examples on disclosing economic relationships, which it updates periodically.

The Guidelines were substantially strengthened in September 2020 and have been amended since, most recently in 2026 to address AI-generated virtual people.

2. What Counts as an “Economic Relationship”

Disclosure is required whenever a relationship could affect the credibility of the endorsement and consumers would not expect it. This includes:

• Cash payment for a post or video
• Free products, including products sent “for review” with no payment
• Discounts, gift cards, coupons, or trips
• Sales commissions, including affiliate links and discount codes that earn the influencer a share of sales
• Ongoing relationships, such as brand ambassador or employment relationships

Key takeaway: “We didn’t pay them, we just sent free products” is not a reason to skip disclosure. Gifted products and affiliate commissions are economic relationships.

3. How to Disclose: Wording, Placement, and Language

Wording

The disclosure must be clear and immediately understandable to consumers. Acceptable examples include:

• advertisement
• sponsored
• includes paid advertising
• written after receiving free products from [Brand]
• received economic compensation from [Brand]

Vague phrases such as product trial group, “Thanks to [Brand],” or “with [Brand]” are not enough on their own.

Language

The disclosure should be in Korean. English expressions such as “#ad,” “#sponsored,” or “Thanks to” may not be understood by Korean consumers and are generally considered inadequate. Foreign brands that copy global campaign wording are especially exposed here.

Placement

The disclosure must be placed where consumers will see it before or as they read or watch the content:

• In the title or the first part of the body or caption
• Not hidden behind see more, not only in the comments, not only in the profile, and not buried among many hashtags at the end

Size and visibility

Text must be large enough and in a contrasting color. Disclosures in a tiny font, in a color that blends into the background, or that appear only for a moment do not meet the standard.

4. Platform-by-Platform Rules

Platform	Where to disclose
Instagram feed	First line of the caption, before “더보기.” A disclosure in the image itself is also effective.
Instagram Stories	On each frame featuring the sponsored product, not only the last one
YouTube (long-form)	In the title or at the start of the video, by voice or on-screen text. For long videos, repeat it periodically so viewers who skip ahead still see it.
Shorts, Reels, TikTok	On screen early in the video, and in the first line of the description
Live streaming and live commerce	Repeatedly throughout the broadcast, so viewers who join midway also see it
Naver Blog and online cafés	In the title, or at the very beginning of the post

A platform’s built-in disclosure feature, such as YouTube’s “includes paid promotion” label, can help, but brands should not rely on it alone. Add a Korean disclosure in the content itself.

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5. AI-Generated Virtual Influencers (2026 Amendment)

In 2026, the KFTC amended the Guidelines to address virtual people created with AI.

• New endorser category: AI-generated virtual people are now treated as a separate category of endorser.
• Mandatory labeling: when a virtual person endorses a product, the advertisement must make clear that the person is virtual.
  • Text media (blogs, online cafés): state in the title or opening that the post includes a virtual person created with AI.
  • Video and photos: display a label such as virtual person near the virtual person while it appears.
• Fake experience and fake experts: a virtual person presenting a personal experience with a product it could not have had, or appearing as a doctor, pharmacist, or professor to lend credibility, can be treated as deceptive advertising.

Key takeaway: Brands using AI models or AI-generated spokespeople in Korea, which is increasingly common in beauty and fashion, should review existing content, not only new campaigns.

6. Who Is Liable, and the Penalties

The brand is the primary target

Under the Act, liability falls on the business that advertises its products, which is generally the brand or its Korean distributor. The KFTC has sanctioned major cosmetics and consumer goods companies for influencer posts that did not disclose payment. Brands cannot avoid responsibility by pointing to the influencer or an agency.

Foreign brands without a Korean entity

Where a foreign brand sells through a Korean importer or distributor that runs the local campaign, that company is likely to be treated as the advertiser. Foreign brands running campaigns directly into Korea should assume Korean rules apply to content aimed at Korean consumers.

Penalties

• Corrective orders, including an order to publicly announce that the company violated the law
• Administrative surcharges of up to 2% of related sales, or up to KRW 500 million where sales cannot be calculated
• Criminal penalties of up to two years’ imprisonment or a fine of up to KRW 150 million
• Reputational damage: KFTC decisions are public, and undisclosed advertising draws strong consumer backlash in Korea

7. Content Rules That Apply on Top of Disclosure

Disclosure does not make the content itself lawful. Influencer content is advertising and must also comply with sector-specific advertising rules, which are often stricter than in other markets:

• Cosmetics (Cosmetics Act): no claims that a product treats or prevents disease, or that suggest it is a drug. Functional claims such as whitening, anti-wrinkle, and sun protection require functional cosmetics certification from the Ministry of Food and Drug Safety. (See our earlier article on cosmetics market entry.)
• Food and health functional foods (Food Labeling and Advertising Act): no disease prevention or treatment claims. Advertising for health functional foods generally requires prior self-regulatory review.
• Medical devices: advertising generally requires prior review.
• Comparisons and “No. 1” claims: must be supported by objective evidence.

An influencer saying “this cleared up my acne” for an ordinary cosmetic can create a problem even with perfect disclosure.

8. Campaign Checklist and Contract Terms

Before the campaign

• Prepare Korean disclosure wording and placement rules for each platform
• Brief influencers and agencies (MCNs) in writing, with examples
• Review the product claims influencers may and may not make under cosmetics, food, or other sector rules
• If using AI-generated people, prepare virtual person labels

Contract terms with influencers and agencies

• Obligation to disclose in the specified Korean wording and placement
• Brand approval of content before posting
• Prohibited claims (medical, efficacy, and comparison claims without evidence)
• Right to require correction or removal of non-compliant content
• Payment conditional on compliance, and the right to withhold or reclaim payment for violations
• Indemnity from the influencer or agency for violations they cause
• Record-keeping: screenshots and links of all posts, kept for later regulatory inquiries

During and after the campaign

• Monitor every post, including Stories and live broadcasts
• Fix non-compliant content immediately and keep a record of the correction
• Review affiliate programs and gifting programs, which are easily overlooked

9. Conclusion

Korea’s influencer advertising rules are specific and strictly enforced. Any economic relationship, including free products and affiliate commissions, must be disclosed in clear Korean, at the start of the content, in a way consumers cannot miss. Since 2026, AI-generated virtual people must also be labeled. The brand carries the primary legal risk, and the content must also meet Korea’s strict sector rules for cosmetics, food, and health products.

For foreign brands, the most common mistakes are copying global disclosure practices (“#ad” in English, at the end of the caption) and assuming the influencer or agency is responsible. A Korea-specific disclosure guide and influencer contract, prepared before launch, prevents most of them.