Criticism mounts over ‘soft’ penalties for power bloggers

Netizens on Monday expressed anger at the “soft” penalties given to power bloggers who made huge illegitimate profits.

The Fair Trade Commission announced on Sunday it levied a fine of 5 million won each on four power bloggers for not revealing that they wrote favorable product reviews in return for a commission.

According to the FTC, brokering a collective purchase of a product online is legal, but bloggers are required to reveal they get paid a commission for organizing such mass purchases.

The four bloggers are Moon Sung-sil (“Moon Sung-sil’s Dinner Table Conversation,” Hyeon Jin-hui (“Baby Rose’s Little Kitchen”), Oh Han-na (“My Dream’s Happy Cooking”) and Lee Hye-yeong (“Johanna’s Happiness Blog”).
Online and social network users criticized the bloggers who earned up to 800 million won ($708,450) each in commission for organizing collective purchases on their blogs.

Some of the bloggers in question are continuing to run their sites despite the scandal that sparked a debate about whether the government should regulate what power bloggers do.

Also causing anger are the FTC’s fines, which netizens say are too small to have an impact on the businesses run by the bloggers.

Moon Sung-sil, who runs the disgraced blog on Naver, the country’s biggest portal, raked in commission of about 800 million won over a year and was fined by the FTC, but is still uploading new posts and has given no indication she will quit.

In response to the negative reaction, Moon posted an article on Monday saying that she sold products valued at 158.3 billion won between July 2010 and June 2011, and earned a net profit of 164 million won out of her commission that reached 845 million won.

Hyeon Jin-hui, a blogger who runs a similar food-related blog, earned 770 million won in commission, a huge sum of money that easily outpaces the profits of small companies run by retirees.

A handful of power bloggers usually charge a commission of 2-10 percent for a product sold through their favorable reviews or collective purchase programs.

Although a growing number of people in Korea are moving from blogs to Twitter and Facebook with the help of smartphones, power bloggers command a strong influence among local users.

The so-called “power blogger” system run by major portals such as Naver and Daum is generating a series of side effects in recent years as some of them are engaged in commercial transactions that often violate disclosure rules and result in sales of faulty products to unsuspecting visitors.

Naver has named 786 power blogs and Daum has 449 top bloggers.

The FTC said Naver runs 7.81 million online communities and 28.5 million blogs, while Daum hosts 8.5 million cyber cafes and 8 million blogs.

The FTC said it would come up with a set of guidelines about online commerce via Web communities and blogs to prevent the recurrence of irregular activities.

By Yang Sung-jin (insight@heraldcorp.com)