A civic group in South Korea has requested an investigation by the Fair Trade Commission (FTC), accusing Apple of false and exaggerated advertising related to its AI features. A lawsuit has also been filed in the U.S. over Apple’s AI ads, suggesting that legal battles on this issue could spread globally.
Apple was reported for allegedly violating advertising disclosure laws
On Monday, Seoul YMCA announced that it had filed a report with the FTC requesting an investigation into Apple for allegedly violating advertising disclosure laws. On March 13, the organization warned it would consider a criminal complaint if Apple did not present a compensation plan. After receiving no response, the group took action. Under the Act on Fair Labeling and Advertising, anyone who engages in false or misleading advertising can face up to two years in prison or a fine of up to 15 million won (about $11,200). The law also includes joint liability, allowing corporations to be fined.
At its annual Worldwide Developers Conference (WWDC) last June, Apple introduced Apple Intelligence, an AI system with a more personalized Siri. According to the announcement, the AI-powered Siri was expected to launch with iOS 18, but the release has been delayed until next year. Apple has also removed the related ad from YouTube.
While selling the iPhone 16 series, Seoul YMCA stated that Apple promoted the Apple Intelligence feature despite its unclear feasibility as a key selling point, significantly influencing consumers’ decisions to purchase the iPhone 16 series. They pointed out that by falsely presenting an important detail that affects product choice, Apple caused substantial financial harm to consumers. They added that they would closely monitor the investigation process and results and take follow-up actions accordingly. They also emphasized plans to continue tracking businesses that violate advertising disclosure laws and cause harm to consumers.
FTC will handle the case according to principles… Lawsuit also filed in the U.S.
If it meets the requirements, the FTC said it would review the report and deal with the case according to established principles and procedures. However, with many other pending cases, action on this may take several months.
An official from the FTC said that the local offices usually handle reported cases. If the case meets the requirements, they will accept the report and request data from Appleto to determine whether false or exaggerated advertising occurred. The official added that if there is evidence of a violation, the case will be submitted to the commission for review and action. However, since many other cases are pending, it is unlikely that any action will be taken within the next few months.
The legal dispute over Apple’s AI features is not limited to South Korea. In the United States, the Clarkson Law Firm filed a lawsuit on March 19 in the San Jose District Court on behalf of people who purchased the iPhone 16 and other devices, claiming that Apple’s advertising of the Apple Intelligence feature constitutes false advertising and unfair competition.
The plaintiffs said that, contrary to Apple’s claims about its AI features, the products offered Apple Intelligence with little or no functionality, misleading consumers about its usefulness and performance. They added that the bigger problem is that the defendant promoted the products based on these exaggerated AI features.
