[Fair Trade Commission Corporate Advisory] Daeryun Raised an Objection to the Fair Trade Commission Based on Corporate Advisory and Established Fair Trade

• Act on Fair Labeling and Advertising Article 3 (Prohibition of Unfair Labeling and Advertising)

(1) No business operator or other entity shall engage in, or cause another business operator or entity to engage in, any of the following labeling or advertising acts that may deceive consumers or mislead them and that may undermine fair trading order:

1. False or exaggerated labeling or advertising

2. Deceptive labeling or advertising

3. Unfairly comparative labeling or advertising

4. Slanderous labeling or advertising

(2) The specific content of each act under paragraph (1) shall be prescribed by Presidential Decree.

• Act on Fair Labeling and Advertising Article 7 (Corrective Measures)

(1) Where a business operator or other entity engages in an unfair labeling or advertising act in violation of Article 3 (1), the Fair Trade Commission may order the business operator or entity to take any of the following measures for its correction:

1. Cessation of the violation

2. Public announcement of the fact of having received a corrective order

3. Corrective advertising

4. Other measures necessary to correct the violation

(2) Matters necessary for the public announcement of the fact of having received a corrective order and for corrective advertising under paragraph (1) 2 and 3 shall be prescribed by Presidential Decree.

• Act on Fair Labeling and Advertising Article 9 (Penalty Surcharge)

(1) The Fair Trade Commission may impose on a business operator or other entity that has engaged in a labeling or advertising act in violation of Article 3 (1) a penalty surcharge not exceeding an amount calculated by multiplying the revenue prescribed by Presidential Decree (in the case of a business operator prescribed by Presidential Decree, this means operating profit; the same shall apply hereinafter) by 2/100. However, where the person who committed the violation has no revenue or the revenue is difficult to calculate, and the person is a business operator or other entity prescribed by Presidential Decree, a penalty surcharge not exceeding 500 million won may be imposed.

(2) The Fair Trade Commission may impose a penalty surcharge of up to 500 million won on a business operators' association that, in violation of the main clause of Article 6 (1), has restricted a business operator's labeling or advertising acts.

(3) Where the Fair Trade Commission imposes a penalty surcharge under paragraph (1) or (2), it shall consider the following matters:

1. The content and degree of the violation

2. The period and number of the violations

3. The scale of the profit obtained from the violation

4. The degree of effort the business operator or entity made to prevent or compensate for consumer harm

(4) Where a corporate business operator that has violated Article 3 (1) undergoes a merger, the violation committed by that corporation shall be deemed to have been committed by the corporation surviving the merger or the corporation established through the merger, and a penalty surcharge shall be imposed and collected accordingly.

(5) The criteria for imposing a penalty surcharge under paragraph (1) or (2) shall be prescribed by Presidential Decree.