KFTC’s Market Survey and Guidelines on AI Washing (Part 3)

What types of conduct does the Korea Fair Trade Commission (“KFTC”) aim to regulate as AI washing?

This newsletter is the third of the series in which we will introduce the KFTC’s AI Washing Status Survey and Guidelines, and explore the KFTC’s stance on AI washing.

I. Types of AI Washing and Regulatory Trends
II. Enforcement Trends in Korea and Other Jurisdictions
III. KFTC’s Market Survey and Guidelines on AI Washing
IV. AI Washing Compliance

The KFTC, in collaboration with the Korea Consumer Agency, conducted monitoring and consumer awareness survey over suspected cases of ‘AI Washing’ on November 7, 2025, and announced the results of the first status survey, as explained in detail below.

KFTC’s Monitoring and Corrective Measure Cases

The KFTC monitored suspected cases of AI washing in home appliances and electronic products sold on major domestic open markets. It identified a total of 20 cases of suspected AI washing and took corrective measures such as voluntary correction or deletion. Below is a summary of the representative cases.

(1)

Cases where the expression ‘AI’ is included in product names or AI features are exaggerated in advertisements even though the product cannot be viewed as utilizing AI technology (19 cases)

For cases where a product name included “AI” or where the advertisement exaggerated AI functionality even though it could not be viewed that AI technology has been utilized, such as the application of a simple sensor technology not based on machine learning, the KFTC required these expressions to be modified to a more accurate description, such as “automatic temperature control” or entirely removed.

(2)

Case where the operating conditions and limitations of the AI functions embedded in the product was not specified, making it difficult for consumers to perceive such restrictions (1 case)

In this case where the AI functions only operate under specific conditions, but the restrictions such as operating conditions and limitations were not clearly disclosed making it difficult to perceive the restrictions, the KFTC ordered that the restrictions of the AI functions be clearly disclosed.

Consumer Awareness Survey Results

The KFTC conducted a consumer awareness survey to understand the impact of AI washing on consumers’ purchasing decisions and announced the following survey results.

Item	Key Details
Willingness to pay extra for AI technology	Willing to purchase AI products or services even if they are more expensive (57.9%)
Ability to distinguish products with AI technology applied	Has difficulty in distinguishing products or services with AI technology applied (67.1%)
Policies needed to protect consumers from AI washing	Establish guidelines to prevent AI washing and to assist businesses and consumers’ understanding (31.5%) Develop national standards, technical criteria, certification systems, etc. (26.1%) Continuous monitoring of AI washing (19.4%)

Based on the results of the consumer awareness survey, the KFTC has determined that there is a need to prevent consumer harm and enhance predictability for businesses, and on this basis, has announced plans to establish guidelines on unfair AI-related labeling and advertising, as well as continuous monitoring and corrective activities in cooperation with the Korea Consumer Agency.

Given the KFTC’s announcement of its plans to prepare the legal basis for regulating AI washing by establishing guidelines on unfair AI-related labeling and advertising during 2026, we anticipate the KFTC will more actively engage in monitoring of AI washing going forward. Accordingly, it is advisable to keep a close eye on updates in the regulatory trends taking into account enforcement cases in Korea and abroad and corrective measures imposed by the KFTC, to assist companies to proactively and effectively respond to the KFTC’s future regulatory actions.

In particular, it is strongly recommended to make sure that the company has supporting technical materials when using “AI” in the names of products and services, and to disclose any restrictions or operating conditions pertaining to the activation of the AI function in a clear and easily recognizable manner.

[Korean Version]

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