The online shopping mall Temu, which advertised a 'jackpot promotion' claiming Nintendo consoles could be purchased for 999 won, was sanctioned by the Korea Fair Trade Commission. It turned out that winning was virtually impossible, and the conditions for winning were not properly announced.
The Korea Fair Trade Commission announced on the 11th that it imposed a corrective order, a penalty surcharge of 357 million won, and fines of 1 million won on Elementry Tech Innovation Private Limited, the operator of Temu, for violating the Act on Fair Labeling and Advertising and the Act on Consumer Protection in Electronic Commerce.
According to the Korea Fair Trade Commission, Temu exaggerated the chances of winning by promoting the sale of the Nintendo Switch as a 'special offer of 999 won' with phrases like “Congratulations! You hit the jackpot.” Even though the 'Nintendo Switch for 999 won' event was applicable only to the first person who made the purchase, the company advertised as if multiple winners were possible or used expressions that confirmed winnings, thereby distorting the truth.
Temu also displayed a timer to make it appear that the discount coupon provision was time-restricted, but in fact, the same coupon was provided repeatedly upon re-accessing without even installing the app. The 'free offer' events with conditions, such as recommending friends, were made difficult for consumers to easily understand the actual conditions, leading the Korea Fair Trade Commission to deem these as false and misleading advertisements under the Act on Fair Labeling and Advertising.
There were also issues in the process of order cancellations and returns. Temu unilaterally refused refunds citing reasons like ‘same-day shipping initiation’ or passed on shipping costs and tariffs to consumers, infringing on their rights. Even when users pressed the return button in-app, it did not result in actual processing, or excessive document submissions were demanded, causing procedural inconvenience.
In addition, Temu omitted legal notifications required as a mail-order business operator. The website and app initial screens did not display business identity information or terms of use, and services were operated without the required mail-order business registration. The obligation to specify when a company is not the contracting party for online sales was also not adhered to.
An official from the Korea Fair Trade Commission noted, “It will help prevent consumer damages by ensuring that foreign companies entering the domestic market comply with the obligations under the Act on Fair Labeling and Advertising and the Act on Consumer Protection in Electronic Commerce,” and added, “We will respond strictly to any legal violations.”