1.

Regulation of AI Washing Outside of Korea

In the U.S., AI washing is regulated primarily by the U.S. Federal Trade Commission (the “US FTC”) and the Securities and Exchange Commission (the “US SEC”). The US FTC has emphasized the importance of preventing deceptive marketing practices such as generating fake product or service reviews using AI and advertising the use of AI tools when they are not actually used. As shown below, the US FTC has also expressed concerns about advertisements claiming that AI technology can completely replace human experts, cautioning against deceptive and unsubstantiated marketing claims involving AI.

Notable cases reviewed by the US FTC and US SEC to date are as follows:
 

(1)

A Company
A Company, a legal service provider, advertised that it provides professional legal services through its AI chatbot which can replace human lawyers, but failed to substantiate such claims. In February 2024, the US FTC ordered A Company to pay USD 193,000 in monetary relief, notify its past subscribers about the US FTC’s order, and stop making deceptive claims about the abilities of its AI chatbot.
 

(2)

B Company
B Company advertised that its AI Content Detector program could determine whether written content was generated using AI technology with 98% accuracy. The US FTC found that B Company failed to substantiate this claim with sufficient evidence. On April 28, 2025, the US FTC issued an order requiring B Company to, among other things, stop engaging in misleading and unsubstantiated advertising unless it has “competent and reliable evidence” to support the claim made, retain evidence to support such efficacy claims, and notify consumers about the order.
 

(3)

C Company
In 2023, the US FTC filed a case against C Company alleging that in order to attract investments, the company falsely claimed that its AI technology automatically increases sales of online stores. The U.S. federal court reviewing the case found that AI technology was actually not used in the money-making scheme, and most customers failed to recover their investments in C Company, let alone earn profits. In February 2024, the court ordered C Company to cease operations, pay USD 22 million in damages, and permanently banned the operators of the company from offering business opportunities or coaching for e-commerce.
 

(4)

D Company and E Company
Investment advisory firms D Company and E Company advertised that they use AI technology to predict stock market trends. The US SEC charged both firms, finding that they were actually relying solely on traditional statistical models without any use of AI technology. In March 2024, the SEC settled the charges with D Company and E Company, with each agreeing to pay fines of USD 225,000 and USD 175,000, respectively.
 

Other than the US FTC and US SEC, the U.S. advertising self-regulatory organization, the National Advertising Division (NAD), reviews AI-related advertisements that are submitted on a voluntary basis and recommends corrections. After undergoing such review, major big tech companies have modified or withdrawn some of their AI-based service advertisements.

In Europe, the European Commission (EC) and the UK’s Competition and Markets Authority (CMA) have not yet imposed sanctions in connection with AI washing. However, the UK Advertising Standards Authority (“UK ASA”), a voluntary regulatory body in the UK, has taken notable action. On October 28, 2023, the UK ASA requested Pixelup to take corrective action regarding its Instagram advertisement, which contained unsubstantiated claims that AI could enhance photo clarity. Following this, on November 22, 2024, the UK ASA also published a report on AI advertising, urging companies to avoid making misleading claims about AI.

Based on the above, regulatory authorities outside of Korea are expected to continue actively reviewing and taking enforcement actions against false or deceptive advertisements involving AI. This trend may directly affect domestic companies operating abroad and also impact the enforcement practices of Korean authorities.

2.

Regulation of AI Washing in Korea

Korean authorities have not imposed sanctions in connection with AI washing to date. However, considering the aforementioned international regulatory trends targeting false and deceptive AI-related claims, the risk of enforcement actions by regulatory authorities in Korea, such as the Korea Fair Trade Commission (the “KFTC”), is expected to increase.

The KFTC recently conducted a consumer survey on AI washing in collaboration with the Korea Consumer Agency to assess the current state of AI washing online in Korea and gather data for establishing policy directions. Based on this survey, the KFTC is expected to investigate the AI-related advertising practices of domestic businesses and develop detailed guidelines to regulate AI washing.

Thus, although Korea’s standards for regulating AI washing are still in development, given the enforcement activities in other jurisdictions, the KFTC may establish more detailed criteria for accessing AI and amend laws and regulations to effectively address AI washing.