Photo/Illutration The Consumer Affairs Agency offered this Instagram post as a case of misleading representation using the stealth marketing method. The post doesn’t say it is an advertisement. (Asahi Shimbun file photo)

The Consumer Affairs Agency announced it will regulate “stealth marketing” practices from Oct. 1 to help stop consumers from being conned into believing that some paid advertisements are genuine and impartial endorsements of products.

Stealth marketing is a practice in which companies disguise their advertisements online as genuine reviews or feedback, which are actually posted by third parties commissioned by the companies themselves.

The agency will be guided by the law against unjustifiable premiums and misleading presentation in the way it regulates such activities.

Advertisers, rather than third parties such as “influencers,” will be subject to the new regulation.

Entities that violate the new regulation will face an administrative penalty.

Companies go to great lengths to disguise the fact that the reviews or feedback are in fact a form of paid advertisements, hence the term stealth marketing.

If consumers are aware that such reviews or feedback constitute nothing more than paid advertising--with a heavy dose of exaggeration thrown in--they are more likely to bear those aspects in mind when pondering whether to purchase certain products or services, critics say.

But, of course, some consumers are unable to detect such tactics when watching the advertisements, which is the reason stealth marketing methods are viewed as problematic.

An expert panel advising the agency proposed regulating stealth marketing last year.

As a result, the agency added stealth marketing to its list of types of misleading representations, which are then posted for the public to see.

Other types of misleading representation in the list include so-called bait advertisements.

The agency also announced March 28 that it defined stealth marketing as “representations that are difficult for general consumers to recognize as representations by business operators.”

The same day the agency published a document titled “Operation standards” that explains what constitutes stealth marketing under the new regulation.

The document largely focuses on two criteria to determine if advertisements rely on stealth marketing methods.

The first one is if advertisements are clearly presented as such.

Advertisements are not subject to the new regulation if words such as “advertisement” or “promotion” are clearly displayed, the document says.

However, advertisements are regarded as using the stealth marketing method if the words are not displayed clearly, printed in small letters or in pale colors so as to be almost invisible.

The second one is whether third parties are involved in the contents of the advertisements.

The document says the agency will determine on a case-by-case basis if advertisements use the stealth marketing method based on objective information such as exchanges between companies and third parties, rewards paid to third parties, whether the companies paid rewards to the third parties in the past and whether such a relationship between them still exists and will continue into the future.

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