Chapter 2. Endorsements, Reviews, and Virtual Humans

Learning objectives

• Explain the scope of 'Endorsements, testimonials, etc.' specified in the Examination Guidelines for Labeling and Advertising Concerning Endorsements, Testimonials, etc., and distinguish them from an advertiser's own phrasing.
• Apply the general principles of endorsements and testimonials (genuine experience, prohibition of distortion, modification and Withdrawn, continuous use, generality, and Burden of proof) to case studies.
• Identify situations where economic interest must be disclosed versus exceptions, and select appropriate disclosure wording and placement for each medium.
• Determine the required disclosures and expressions to avoid when an AI-generated Virtual persona appears in an advertisement.
• Distinguish between permissible scope and lines that must not be crossed when categorizing, summarizing, or editing reviews using AI.
• Reflect disclosure obligations in influencer contracts and post-publication monitoring.

Introduction

Consider a meeting held by marketers of a cosmetics brand. One person says, "Influencer booking fees are too high, so let's use AI to create a realistic model and film review videos." Another person says, "The sentences in customer reviews are a mess, so let's use AI to polish them before posting." A third person asks, "For sponsorship disclosure, isn't it enough to just add '#Sponsored' at the very end?" All three sound like efficient proposals, but all three can mislead consumers into mistaking advertisements for "A third party's genuine experience."

The reason endorsements and reviews are powerful is that consumers accept them as the independent opinion of someone other than the advertiser. For this reason, the Fair Trade Commission's Examination Guidelines for Labeling and Advertising Concerning Endorsements, Testimonials, etc. require three things to ensure this trust is not betrayed: endorsements must be based on genuine experience or actual professional judgment, the compensated relationship between the advertiser and the endorser must be revealed, and an AI-generated Virtual persona must be disclosed as a Virtual persona. The current guidelines (Established Rule No. 499), which took effect on June 1, 2026, contain specific provisions for a Virtual persona and disclosure methods by medium.

This chapter first reviews the scope and general principles of 'Endorsements, testimonials, etc.', and summarizes the principles of disclosing economic interest alongside methods by medium. It then covers a Virtual persona, handling reviews with AI, and influencer contracts in sequence.

Key concepts

Scope of 'Endorsements, testimonials, etc.'

The examination guidelines define Endorsements, testimonials, etc. as content that "can be recognized as the Independent opinion of a third party, rather than the opinion of the advertiser." There are two branches:

1. Content that evaluates a product as good in terms of efficacy, effects, or performance, or recommends purchase or use, based on personal experience of using or testing it
2. Content in which an expert or organization announces a product as good, or recommends purchase or use to general consumers

The form of expression can be anything: voice, text, signature/seal, photo, video, etc. The core question is "Whose opinion does it appear to be?" A 'Recommended product of the month' published under a company's name represents the advertiser's own opinion even if the word 'Recommendation' is used, whereas a review written by a blogger based on personal experience constitutes endorsements and testimonials regardless of the specific wording used.

The examination guidelines also define celebrities. These are individuals who are widely known or can exert influence over consumers via TV, the internet, SNS, etc., such as entertainers, cultural artists, athletes, doctors, professors, religious figures, and bloggers. Influencers fall under this definition. However, the obligation to disclose economic interest does not apply solely to celebrities; general consumers with few followers must also disclose it if they endorse a product in exchange for compensation. When a celebrity intentionally exposes a product on SNS, mentions a brand or product name, or provides a purchase link, this can also be viewed as an endorsement or testimonial.

General principles of endorsements and testimonials

The general principles of the examination guidelines are tested even more frequently in the era of AI. Summarized into six principles, they are as follows:

Consumer reviews

An endorsement that showcases consumer experience requires that the consumer actually used the product and that the content expressed in the advertisement conforms to their genuine experience. The examination guidelines cite the following as examples of improper practices: thank-you letters or success stories from non-existent consumers, reviews posted without having used the product, Exaggeration in experiential accounts, thank-you letters to which the advertiser added specific rankings, and accounts of experiences presenting effects that appear only in a fraction of individuals with a particular constitution as if they were universal.

When AI enters the realm of reviews, these principles are immediately put to the test. If one collects only favorable expressions from multiple reviews to create a new 'Representative review', no person in the world has had that exact experience. In the process of smoothing out rough sentences, if 'Became a little more moisturized' is turned into 'Skin completely transformed', the substance of the experience is altered.

Celebrities, experts, and organizations

When a celebrity makes an endorsement based on experience, they must have actually used the product; when evaluating a product from an expert's standpoint, it must be within their own field. The examination guidelines cite as an improper example a broadcaster who is a dentist speaking about the efficacy of a digestive medicine like a medical expert. Using a celebrity's name in a product name can be regarded as an endorsement by that person.

An expert's endorsement must be based on actual specialized knowledge and conform to that individual's judgment. Endorsements by professors in unrelated fields, test results under an expert's name when tests were not actually performed, and arbitrary citations of expert opinions are improper.

An endorsement by an organization or institution must come from an entity qualified to evaluate the matter and must follow internal procedures reflecting official decisions. Using an individual member's opinion as an association endorsement or using a recommendation letter from an overseas research institute that issues recommendation letters merely upon payment of a fee are improper examples.

Economic interest: when to disclose

If an economic interest exists between the advertiser and the endorser that could affect the endorsement content or its credibility, the advertiser or the endorser must disclose it. Compensation cited by the examination guidelines includes cash, the product in question, gift certificates, reward points, discount benefits, and direct employment by the advertiser. Disclosure must be made for each instance of an endorsement or testimonial.

What the exceptions have in common is that the compensation was not conditioned on writing a review, was provided equally to everyone who received it, and the review was voluntary. The moment a sample or points are given on the condition of writing a review, it ceases to be an exception.

Four principles of disclosure: placement, form, content, and language

The examination guidelines consider disclosure methods appropriate if they satisfy the following principles:

1. Placement: Place the disclosure close to the endorsement content so that consumers can easily find it, and in a way that it is recognized as a single post with the endorsement. Disclosures inserted inconspicuously in the middle of body text, disclosures placed in comments, or disclosures that become visible only after clicking 'See more' are examples of placements that are not easily found.
2. Form: Use a font size, font style, and color that are clearly distinguished from the background; for audio, ensure it can be understood without adjusting the volume or playback speed.
3. Content: Clearly state the nature of the relationship, such as financial support, discounts, or sponsorship, in an easy-to-understand manner.
4. Language: Use the same language as the endorsement.

Disclosure methods by medium

The examination guidelines present specific methods for each medium, and state that even if a method is not among those presented, it may be deemed appropriate as long as it satisfies all four principles.

Keep in mind the unacceptable examples cited by the examination guidelines as well: cases where '(Received sponsorship)' was attached at the end of the title but was cut off on mobile devices, cases where an economic interest was mentioned only once during a 30-minute broadcast, cases where disclosures were mixed among multiple hashtags, and cases where text in a photo blended into the background.

AI virtual personas

Section V.5 of the examination guidelines addresses cases where an endorsement or testimonial is made using a Virtual persona that is Difficult to distinguish from reality based on artificial intelligence or similar technologies. Here, artificial intelligence follows the definition in Article 2, Subparagraph 1 of the AI Basic Act.

1. Disclosure obligation: It must be disclosed that the endorser in question is a Virtual persona generated via AI or similar technologies.
2. Method: The method must be one that consumers can clearly and easily recognize. Acceptable examples include placing copy such as 'This post contains an AI-generated virtual persona' or 'Contains a Virtual persona (virtual consumer, virtual celebrity, virtual expert, etc.)' in the title or at the beginning of a post; for photos and videos, acceptable examples include displaying wording such as 'Virtual persona' near the Virtual persona while it appears.
3. Expression of experience: If an endorsement by a Virtual persona is portrayed as being based on empirical facts but does not conform to genuine experience, it may constitute unfair labeling or advertising.

The third item is particularly important in practice. A Virtual persona has no experience using a product. Lines such as "After using it for two weeks, my skin texture changed" cannot conform to genuine experience no matter how well the disclosure is made, and must therefore be replaced with lines that convey product information.

Permissible scope when handling reviews with AI

Using AI for review management is not inherently prohibited. The criteria are "Does the content of the review—that is, the person's genuine experience—change?" and "Does the overall impression received by consumers align with the actual distribution of reviews?"

AI summaries are convenient, but if a summary represents only positive reviews, consumers will misunderstand the actual distribution. In summaries, include both the proportion and main points of negative opinions, and link to the original reviews.

For online malls, check the Act on the Consumer Protection in Electronic Commerce, etc. as well. Article 21-4 of the Act on the Consumer Protection in Electronic Commerce, etc. and Article 27-3 of its Enforcement Decree, which took effect on July 21, 2026, require business operators that post consumer reviews to disclose the scope of persons eligible to write reviews, the posting period, the rating evaluation criteria and their effects, and the criteria for deletion along with the objection procedure upon deletion, on the initial screen where reviews are viewed (or on a screen directly connected if space is insufficient). If AI is used to mask or sort reviews, those criteria must align with the disclosed criteria.

What to include in influencer contracts

The disclosure obligation rests on both the advertiser and the endorser. The examination guidelines state that the "advertiser or endorser/testifier" must disclose, and Article 3 of the Fair Labeling and Advertising Act also prohibits causing another business entity to engage in unfair advertising. Since an influencer omitting a disclosure does not eliminate the advertiser's liability, include the following starting from the contract stage:

1. The specifics of the compensation (manuscript fee, product, discount, etc.) and the obligation to disclose those specifics in each post
2. Disclosure wording and placement by medium (at the beginning, within the photo, the first hashtag, at the start/end of a video and repeated)
3. The actual period of use and a commitment to write based on genuine experience (not posting experiential stories written by the advertiser verbatim)
4. The principle that efficacy and numerical claims may only be made within the scope for which the advertiser possesses substantiating data
5. The scope of pre-posting draft review (disclosures and factual claims) and the prohibition of deleting or moving disclosures after posting
6. Contact procedures when modifying or withdrawing an endorsement

Selecting disclosures by scenario

The decision to select a disclosure can be summarized into four questions:

1. Is it an endorsement or testimonial? Does it appear to be an Independent opinion of a third party, or is it the advertiser's own advertisement?
2. Is there an economic interest? Is there cash, a product, a gift certificate, points, a discount, or an employment relationship? Is it an exceptional case where the relationship does not affect the endorsement content or credibility (e.g., a review written voluntarily using a sample given to all applicants)?
3. What is the medium? Text, photo, video (entire, partial, celebrity exposure), live broadcast.
4. Is it a Virtual persona? Does an AI persona that is Difficult to distinguish from reality appear? Are there experiential lines?

Combining the answers to these four questions determines the disclosure wording (what), placement (where), and form (how).

Going deeper

Whose words are AI-summarized reviews?

Suppose "AI Review Summary: Most buyers report fast absorption" appears at the top of a product details page. Are these words those of the consumer, or those of the advertiser? Although consumer reviews were used as the raw material, the advertiser's system determined what to select and how to summarize it. Because consumers perceive this summary as "a compilation of the independent opinions of other buyers," if the summary distorts the actual distribution, both the principle prohibiting the distortion of Endorsements, testimonials, etc. and the issue of deception (Concealment and Omission of material facts) arise together.

There are three working principles. First, determine and record the summarization criteria (which reviews to select, and in what proportions) in advance. Second, include positive and negative reviews according to their actual proportions, and do not omit recurring complaints (such as fragrance, volume, or delivery). Third, provide a path to the original reviews right next to the summary. Regularly check the results of the summarization model against samples of the original text to ensure they are not biased to one side (refer to the evaluation methods in Chapter 4).

The identity of brand-operated virtual influencers

A virtual influencer account operated directly by a brand faces a two-layered disclosure problem. One is the fact that it is a Virtual persona, and the other is the fact that the account is the advertiser itself. If followers perceive the account as an independent influencer, the account's recommendation appears as an "Independent opinion of a third party," and thus must be handled as an issue of Endorsements, testimonials, etc.

Disclosing that it is a Virtual persona must be done for each post in a manner that consumers can clearly and easily recognize. Displaying it in the title or opening section for text, or in close proximity while the Virtual persona appears for photos and videos, is an Acceptable example under the review guidelines; it is Safe to view stating it once in the profile bio as insufficient. At the same time, ensure that consumers can easily recognize that the account is an advertising account operated by the brand, and design the content in a format that conveys product information instead of experiential dialogue.

Boundaries of employees, agencies, and affiliate marketing

Employee participation campaigns cost little and seem to receive good responses, but the review guidelines explicitly state cases where employees of an advertiser or an advertising agency post recommendation texts as examples of an economic relationship. Even if an employee posted voluntarily, the employment relationship itself is an interest, so disclosure is required. If the company uses AI to create draft copy examples, distributes them, and has employees post them as they are, the actual experience requirement is undermined in addition to the disclosure issue.

The same applies to affiliate marketing (commissions via purchase links). The review guidelines cite disclosures such as "Received a nominal commission" on commission-earning blog recommendation posts as an Acceptable example. A post that makes a recommendation with only a link attached and without disclosure becomes a recommendation that conceals an economic interest.

At work

Grape Camping: Live Broadcast and Short-Form Re-Editing

Camping gear brand "Grape Camping" contracted three creators for the launch of a new tent. One conducted a 90-minute live commerce session, another introduced the tent for 4 minutes during a 20-minute camping vlog, and the third posted 5 photo-centric social media posts. The marketing team also made plans to use an AI editing tool to cut the live broadcast into ten 30-second short-form clips and post them to the brand's account.

The manager divided the disclosure methods by medium. For the live stream, "Sponsored ad in progress" was placed in the broadcast title, and the host was instructed to state repeatedly at the beginning, the end, and also throughout the middle that they received advertising fees. For the vlog, the manager accepted the creator's request not to change the title, but placed subtitles at the beginning and end of the tent introduction segment and had the disclosure displayed repeatedly while introducing it. For photo posts, the text "Received sponsorship" was placed inside the photo in a way that distinguished it from the background, and if hashtags were used, "#Sponsored" was placed as the first hashtag.

The problem was the short-form videos. The 30-second clips cut by AI might not include the sponsorship mentions from the live broadcast. The team lead suggested omitting the disclosure, saying, "It is obvious that it is an ad since it is posted on the brand account." Pointing out that the creator's words in the clip would still sound to viewers like a recommendation from a third party, the manager decided to include an on-screen subtitle stating "Includes paid promotion" in every clip. In addition, a human verification step was put in place to ensure that the AI editing did not stitch together only sentences like "I cannot go camping without this tent" to make it look like a stronger recommendation than the original context warranted. The discarded options were "Disclose once in the description" and "Stating in the profile that it is a sponsored account," both of which were rejected on the grounds that they were in locations difficult to find easily.

Day Studio: AI Virtual Model and Review Summarization

Leather accessories brand "Day Studio" produced an advertising video for a card wallet by using AI to generate a model in their 30s who was difficult to distinguish from a real person, instead of shooting with a live model. In the project plan, there was a scene where the model said, "I have been using it every day for a year, and the corners have not worn out at all." On the product details page, they intended to place "Buyer one-line reviews," summarized by AI from 2,300 reviews, at the very top.

The manager revised the video first. The text "Virtual persona" was displayed near the face while the model appeared, and the line "I have been using it every day for a year" was removed because it was something a Virtual persona could not experience. Instead, it was replaced with dialogue describing "the leather and stitching method used for edge finishing," and durability claims were written in the subtitles strictly within the scope of the company's abrasion test data. A marketer suggested that putting "Created with AI" once in the end credits would suffice, but this was rejected because it did not meet the standard of being in close proximity while appearing.

For the review summary, the initial result generated by the AI was entirely filled with praise, stating that "the leather smells good and is sturdy." Checking a sample of the original texts revealed that 18% of the reviews were complaints stating that "Cards fit too tightly." The manager redefined the summarization criteria to present the positive and negative proportions along with the top two complaints, and attached the list of original reviews directly below the summary. A proposal to automatically collapse reviews with a rating of 2 stars or lower was rejected on the grounds that it could be regarded as Concealment.

Common mistakes

1. "If the word 'Recommendation' is not present, it is not an endorsement or testimonial." The standard is not the word itself, but whether it is perceived as an Independent opinion of a third party. Conversely, a "Recommended product" under the company's name is the advertiser's own opinion.
2. "Notifying once on a notice page is sufficient." Economic interests must be disclosed for every single instance of Endorsements, testimonials, etc., in close proximity to the recommendation content.
3. "It is fine as long as '#Sponsored' is somewhere." In principle, the hashtag must be placed in the first position, and mixing it among multiple hashtags or placing it in comments or inside "See more" may not be appropriate.
4. "'AD' and 'Sponsored' are international standards and therefore sufficient." In recommendations targeting domestic consumers, foreign-language expressions are not considered the same language.
5. "If it is disclosed as a Virtual persona, dialogue is free." Separate from disclosure, personal experience stories of a Virtual persona cannot conform to actual experience and can thus become unfair advertising.
6. "Polishing actual customer reviews with AI is merely editing." Original content must not be distorted by the advertiser's processing and restructuring. A Combined representative review combining multiple reviews into a Representative review is an experience that does not actually exist.
7. "If samples were given, they must be disclosed unconditionally." Reviews written voluntarily with samples given unconditionally to all applicants are an exception where disclosure may not be required. If writing a review is set as a condition, it is not an exception.
8. "Disclosure is for the influencer to handle on their own." The review guidelines require either the advertiser or the endorser to disclose, and the law also prohibits causing another business entity to conduct unfair advertising.

Summary at a glance

Check the official docs

• Review Guidelines on Labeling and Advertising Concerning Endorsements, Testimonials, etc.: Definitions, general principles, detailed guidelines for consumers, celebrities, experts, organizations, and virtual personas, principles for disclosing economic interests, and methods by medium. Check the amendment history and application examples of the Virtual persona provisions in the addenda.
• Article 3 of the Act on Fair Labeling and Advertising: Prohibition of directly conducting unfair labeling or advertising or causing other business entities to do so.
• Review Guidelines on Deceptive Labeling and Advertising: Standards for determining whether review summarization or selective exposure constitutes Concealment or Omission of material facts.
• Notification on the Designation of Types and Criteria of Unfair Labeling and Advertising Activities: Examples of unfair labeling related to recommendations and awards, and assessment of impairment to fair trade (including Omission of economic interests).

Self-check

2-1. Among the following, choose those that fall under "Endorsements, testimonials, etc." in the review guidelines on endorsements and testimonials, and write down the reasons. (a) An "Editor's Pick" copy written under the company's name by a shopping mall merchandiser, (b) A star-rating review written by a buyer based on their own experience, (c) A scene where a dermatologist recommends a specific cream on a broadcast.

2-2. Summarize into three common conditions the circumstances cited by the review guidelines as exceptions to the disclosure of economic interests.

2-3. Write one line for each regarding where disclosure statements must be placed for a blog post, a photo-centric social media post, and a video where only a portion contains a recommendation.

2-4. Explain why the three expressions "Tester group", "#BrandName", and "Thanks to ○○" are not recognized as acceptable disclosures, identifying which of the four principles of the review guidelines each connects to.

2-5. When an AI-generated model that resembles a real human appears in an advertisement, explain what problem cannot be solved by disclosure alone.

2-6. Suppose you intend to summarize 1,000 reviews using AI and display them at the top of a product details page. Write three items that must be included when setting the summarization criteria.

2-7. (Design) Write five or more disclosure-related clauses to be included in an influencer contract, and link each clause to which principle of the review guidelines it is designed to observe.

Hands-on tasks