Kakao Entertainment Deceptive Marketing Fine Hits Record High After 8-Year Scheme
The Korean entertainment world is buzzing with shocking news about Kakao Entertainment’s deceptive marketing practices. The company, which controls nearly half of Korea’s music market, has been slapped with a massive fine for tricking fans. Kakao Entertainment deceptive marketing fine totals a whopping 390 million KRW (about $266,000) following an investigation by Korea’s Fair Trade Commission (FTC). This punishment comes after the discovery that the company ran fake social media accounts for eight whole years to promote their music and artists!
How Kakao Entertainment Fooled Millions With Fake Accounts
The FTC’s investigation revealed a sneaky three-part strategy that Kakao Entertainment used to boost their sales. First, they secretly bought or created popular social media channels without telling anyone they owned them. Can you believe they ran 15 different channels this way? Popular accounts like “Idol Research Lab” on Facebook and “Do You Listen to Music?” across Facebook, YouTube, Instagram, and TikTok were actually controlled by Kakao Entertainment! Between October 2016 and February 2024, they posted a mind-boggling 2,353 promotional posts through these fake accounts. Kakao Entertainment deceptive marketing fine reflects how serious this violation was, as millions of fans thought they were getting honest recommendations from fellow music lovers.
The deception didn’t stop there. Kakao Entertainment employees pretended to be regular internet users on popular Korean community sites. They posted on 11 different online forums including TheQoo, PPOMPPU, MLB Park, Instiz, and Dmitory. Between May 2021 and December 2023, they created 37 posts that looked like genuine fan recommendations but were actually company propaganda. This type of sneaky advertising made it impossible for fans to know they were being marketed to.
FTC Fines Kakao Entertainment For Hiring Secret Promotional Agencies
The third part of their scheme involved paying outside marketing agencies to promote their music without revealing who was behind it. Kakao Entertainment hired 35 different agencies and paid them around 860 million KRW ($586,000) to create 427 promotional posts. These appeared on platforms like TheFan and Banana Marketing, with sections called “Idol Issue” and “You Might Like This Issue.” The FTC fines Kakao Entertainment for these practices because they deliberately hid their involvement, making consumers believe they were getting authentic recommendations.
The reach of this deception was massive. The fake social media accounts collectively had 4.11 million followers! The online communities they infiltrated had up to 1.5 million members. That’s a lot of Seoul Crushers and K-pop fans who were being misled without knowing it.
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What makes this case even worse is that Kakao Entertainment knew what they were doing was wrong. The FTC found evidence that the company continued breaking the laws even after their own internal legal team warned them about the issues. With a 43% market share in Korea’s music distribution as of April 2023, Kakao Entertainment used their power to unfairly influence what music people listened to and bought.
Final Thoughts on Kakao Entertainment Deceptive Marketing Fine
The FTC’s decision to fine Kakao Entertainment sends a strong message to the Korean entertainment industry about transparency in marketing. For eight years, the company manipulated fans through fake accounts, pretending to be regular music enthusiasts while secretly promoting their own products. The 390 million KRW fine reflects the seriousness of deceiving consumers and violating fair trade practices.
As Seoul Crushers, we deserve honest information about the music and content we consume. This case highlights how important it is for companies to be transparent about their marketing. What do you think about Kakao Entertainment’s deceptive practices? Would finding out a recommendation came from a company-run account change how you feel about that music?