Penalties for non-compliance
What are the penalties for non-compliance?
Potential penalties are as follows:
- A Korea Fair Trade Commission (KFTC) corrective order
- An administrative fine of up to 2% of relevant revenues, or up to ₩500 million (approx. US$420,000)
- Up to three years’ imprisonment or a criminal fine of up to ₩200 million (approx. US$168,000)
Further, if the substance of the prizes were not accurately specified/advertised, then this could constitute a violation of the Fair Labelling and Advertisement Act, with potential sanctions of up to two years’ imprisonment and criminal fines of up to ₩150 million (approx. US$126,000).
However, it is worth noting that all of the KFTC enforcement actions involving prize promotions in the past ten years (the public records for which are accessible on the KFTC website) have been subject only to a corrective order without any fines or criminal referral.