South Korea Mandates AI Ad Labels to Boost Market Trust

Background

South Korea is set to introduce a mandatory labeling system for advertisements created using artificial intelligence technologies, effective next year. This proactive policy aims to curb the proliferation of deceptive promotions, which often feature fabricated experts or deep-faked celebrities endorsing various products on social media platforms.

Market Context

Following a recent policy meeting, officials emphasized the need for swift action against the growing risks to consumers. These risks are particularly acute for older demographics who may struggle to distinguish between genuine and AI-generated content. The government plans to intensify screening, remove problematic ads, and impose punitive fines.

Local Relevance

Lee Dong-hoon, director of economic and financial policy, stated that such deceptive ads are "disrupting the market order." The new regulations will mandate anyone creating, editing, or posting AI-generated photos or videos to clearly label them as AI-made. Furthermore, platform users will be prohibited from removing or tampering with these labels.

Outlook

The problem has escalated, with AI-driven deepfakes promoting everything from weight-loss pills and cosmetics to illicit gambling sites across major social media channels. The government intends to revise existing telecommunications laws to ensure the labeling requirement, alongside enhanced monitoring and enforcement, takes full effect by early 2026. Platform operators will also bear responsibility for advertiser compliance.

This policy reflects a broader global concern regarding the integrity of digital markets. Unchecked AI-generated content erodes consumer trust, impacting the credibility of online commerce and the overall digital economy. Such regulatory foresight is becoming essential as technology advances, influencing investment patterns and market stability worldwide.

For Kuwait and the wider GCC region, this development offers a valuable precedent. As digital transformation accelerates across the Gulf, the potential for similar challenges with AI-generated content in advertising grows. Proactive policy discussions are crucial to protect regional consumers and maintain robust market integrity, safeguarding investments in the burgeoning digital sector.

Officials note the increasing difficulty in monitoring the sheer volume of AI-fueled deceptive ads. South Korea’s Food and Drug Safety Ministry, for instance, identified nearly 97,000 illegal online food and pharmaceutical ads in 2024 alone. South Korea's decisive policy move could serve as a blueprint for other nations grappling with the ethical and economic implications of advanced AI technology.