1.

What You Need to Know

On June 23, 2026, the Korea Fair Trade Commission (the “KFTC”) announced proposed amendments that clarify the substantiation requirements for performance claims involving artificial intelligence (“AI”) and other new technologies, as well as the procedures for such submissions. The pre-legislative notice also introduces a self-assessment checklist for businesses to test their own substantiation. When the requirements go into effect, businesses will face heavier substantiation burdens for any claims in labeling or advertising.

The comment period runs through July 13, 2026.
 

2.

Background

Under Article 5 of the Act on Fair Labeling and Advertising (the “Display Advertising Act”), an advertiser has the burden of proof for any factual assertions in its labeling and advertising, allowing the KFTC to assess potential violations quickly. The KFTC’s Guidelines on the Operation of Substantiation for Labeling and Advertising (the “Substantiation Guidelines”) set out the detailed standards for requesting, reviewing, and processing substantiation materials, and they have long served as the practical reference point for which claims require proof and how that proof is evaluated.

With the steady release of products and services that emphasize AI performance, there has been uncertainty as to whether new-technology labeling and advertising had been properly substantiated, particularly with respect to claims relating to effects on the human body, safety, and performance.

The procedures for submission of such information had been broad – upon request, substantiation data needed to be provided within 15 days from receipt of a request, with the prior Guidelines defining the grounds for extending the submission period broadly, as “force majeure such as natural disaster.” Such language gave businesses limited predictability.
 

3.

What the KFTC Proposed

The amendments make four principal changes.
 

(1)

Clarified Substantiation Duty for New-Technology Labeling and Advertising

The KFTC clarified that substantiation is required even where a business advertises AI features or other new technologies. Drawing on its adjudicative precedents, it added illustrative expressions that warrant substantiation in relation to the human body, safety, and performance, including claims such as “improves concentration and memory,” “ingredients harmless to the human body,” “safer through AI technology,” and “○○% feather content,” as well as ranking claims such as “No. 1 in satisfaction” and “No. 1 in grade improvement.”
 

(2)

Defined Grounds for, and Shortened Period, for Extensions

The KFTC replaced the broad “force majeure” formulation by importing the grounds for postponement under Article 76 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act. The defined grounds now cover natural disaster, merger or acquisition, commencement of rehabilitation proceedings, bankruptcy, or comparable proceedings, seizure or temporary custody of books or evidentiary documents by an authorized agency, and serious disruption to business operations caused by fire or other disasters. To preserve the principle of “substantiate first, advertise second,” the KFTC also shortened the extension from 30 days to within 15 days from the date the ground ceases to exist.
 

(3)

Advertising Suspension Orders for Non-Submission

If a business continues to advertise without submitting any substantiation within the submission period, the KFTC may order the suspension of that label or advertising. This makes clear that a business must secure substantiation in advance before actively promoting its products, and it allows the KFTC to quickly halt unfair labels or advertising to prevent consumer harm. We highlight the key differences between the current and proposed rules appear in the table below.
 

(4)

New Self-Assessment Checklist for Businesses

The KFTC introduced and distributed a checklist so that businesses clearly recognize their duty to prove any advertised facts and can test their own substantiation methods and standards. The checklist is organized into a first stage that addresses substantiation targets and general requirements before any labeling or advertising, and a second stage that addresses the submission period, submission method, and sanctions for non-submission once the KFTC requests substantiation.
 

3.

Why This Matters

The amendments tighten the substantiation burden for any business making factual claims in its labeling or advertising. Companies that promote AI or other new-technology performance, in particular, now have a stronger reason to secure objective, verifiable evidence beforehand. With the shortened extension period, from 30 days to 15, the practical window to assemble evidence after a KFTC request narrows as well.

Businesses should review the factual claims in their advertising that relate to the human body, safety, the environment, performance, and new technology, and build a system that keeps scientific, objective supporting evidence, such as test results, survey results, expert opinions, and academic literature, on hand. Companies that use exclusivity or ranking claims such as “No. 1” or “the most” should also retain materials that prove the basis and objectivity of those claims. Failure to submit substantiating materials within the required period can lead to an advertising suspension order as well as administrative fines of up to KRW 100 million under Article 20(2)2 of the Display Advertising Act.
 

4.

What to Watch
 

• Submit comments on the proposal by the July 13, 2026 deadline if your business may be affected.

• Track the KFTC’s review of stakeholder and inter-agency comments and its finalization of the amendments through a full committee meeting.

• Reassess existing advertising containing AI, new-technology, or ranking claims for adequate substantiation.

• Update internal response procedures to account for the shortened 15-day extension if substantiation is requested.

• Watch for the effective date and the final comparison table of the revised provisions.