Yanolja Fined 1.5 Billion for Transactional Abuses: Key Practices Cited in Penalty Announcement

Yanolja, Competitor Fined for Unfair Coupon Advertising Practices

Seoul, South Korea – South Korea’s Fair Trade Commission (FTC) has issued penalties against online travel platforms Yanolja and a competitor for deceptive advertising practices involving discount coupons. The FTC resolute the companies engaged in unfair transactions that financially harmed businesses advertising on their platforms.

The core of the issue revolves around high-end advertising packages – including “My Somatic Coupon Advertisement,” “TOP Recommendation,” and “Popular Recommended Package” – sold by Yanolja and its rival. These packages bundled advertising costs with the issuance of discount coupons intended for consumers. Companies purchasing these ad slots were charged a meaningful premium, ranging from 10 to 3 million won per month, with 10-25% of that cost allocated to the coupons.

However, the FTC found a critical flaw in the system: unused coupons were unilaterally extinguished by the platforms at the end of the advertising contract period – often after just one day – with no refunds or options for carryover. This meant businesses effectively lost the value of the unused coupons, despite having already factored the cost into their advertising spend.”This practice abused the platforms’ superior bargaining position and placed an unfair disadvantage on the advertising companies,” stated FTC Head Park Chung-woong. “We are committed to fostering a fair online ecosystem and will take decisive action against violations of fair trade laws.”

The Broader Implications: A Growing Trend of Platform accountability

This case highlights a growing global trend of increased scrutiny over the advertising practices of dominant online platforms. While discount coupons are a common marketing tool, the lack of transparency and the automatic forfeiture of unused value raise serious concerns about fair competition and consumer protection.

Evergreen Insights for Businesses:

Scrutinize Advertising Contracts: Businesses should carefully review the terms and conditions of online advertising agreements, paying close attention to coupon redemption policies and potential losses from unused offers.
Demand Transparency: Request detailed reporting on coupon usage and redemption rates to assess the effectiveness of advertising campaigns.
Negotiate Favorable Terms: Attempt to negotiate terms that allow for coupon carryover or refunds for unused value.
Diversify Marketing Strategies: Avoid over-reliance on a single platform and explore a range of marketing channels to mitigate risk.

The FTC’s action sends a clear message to online platforms: transparency and fairness in advertising practices are paramount. This ruling is expected to prompt a re-evaluation of coupon-based advertising models across the industry and empower businesses to demand more equitable terms.

What specific deceptive marketing tactics did the KFTC identify Yanolja as employing, and how did these practices mislead consumers?

The Penalty & Its Scale

South Korean accommodation platform Yanolja has been slapped with a significant 1.5 billion won (approximately $1.1 million USD) fine by the korea Fair Trade Commission (KFTC) for a series of deceptive practices related to transaction manipulation and misleading advertising. This penalty underscores a growing regulatory scrutiny of online travel agencies (otas) and their duty to ensure fair and obvious dealings with both consumers and business partners – specifically, lodging providers. The KFTC’s decision, announced today, August 12, 2025, marks one of the largest fines levied against a major OTA in South Korea. This case highlights the importance of OTA compliance and the potential consequences of violating fair trade laws.

Core Abusive Practices identified by the KFTC

The KFTC examination revealed several key areas where Yanolja engaged in practices deemed anti-competitive and misleading. These include:

False Discount Claims: Yanolja artificially inflated original prices to create the illusion of larger discounts. The KFTC found instances where prices were raised shortly before a “discount” was applied, meaning consumers weren’t actually receiving a genuine price reduction. This tactic falls under deceptive marketing practices.

Manipulated Rankings: The platform prioritized listings based on commission payments rather than genuine customer reviews or quality. Lodging providers who paid higher commissions were given preferential placement in search results, disadvantaging those who didn’t. This impacts hotel ranking algorithms and consumer trust.

Unfair Contract Terms: Yanolja imposed unfair contract terms on lodging providers, including clauses that restricted their ability to offer lower prices on other platforms or directly to customers. This limits price competition within the accommodation market.

Misleading “Best Price Guarantee”: The KFTC determined that yanolja’s “Best Price Guarantee” was frequently enough misleading, as the conditions for claiming the guarantee were overly restrictive and difficult to meet. This is a clear case of false advertising.

Impact on Lodging providers & the Accommodation Market

These practices had a significant negative impact on lodging providers, especially smaller businesses. By manipulating rankings and imposing restrictive contract terms, Yanolja effectively forced providers to pay higher commissions to maintain visibility and attract customers. This squeezed profit margins and limited their ability to compete effectively. The KFTC’s action aims to restore a level playing field and promote fair competition within the South Korean hospitality industry.

Yanolja’s Response & Future Implications

Yanolja has publicly acknowledged the KFTC’s findings and pledged to implement corrective measures to address the identified issues. These measures include:

1. Revising pricing Algorithms: Implementing transparent pricing algorithms that accurately reflect market rates and avoid artificial inflation.
2. Adjusting Ranking Criteria: Prioritizing listings based on a combination of factors, including customer reviews, quality, and relevance, rather than solely on commission payments.
3. Revising Contract terms: Removing unfair clauses from contracts with lodging providers and ensuring that terms are fair and reasonable.
4. Improving Openness: Providing clear and accurate information to consumers about pricing, discounts, and the terms of the “Best Price Guarantee.”

This case sets a precedent for increased regulatory oversight of OTAs globally. Other platforms, such as Booking.com, Expedia, and Airbnb, may face similar scrutiny if they are found to be engaging in deceptive or anti-competitive practices. The focus will likely be on OTA transparency and ensuring fair treatment of both consumers and lodging partners.

Real-World Example: The Case of the Inflated Room Rate

A recent investigation by a consumer advocacy group in South Korea revealed a specific instance of Yanolja’s deceptive pricing practices. A standard double room at a motel in Busan was listed at 80,000 won. However, the KFTC found that the price had been artificially raised to 120,000 won just hours before a “33% off” promotion was applied, effectively reducing the price back to 80,000 won – the original rate. This illustrates the manipulative tactics employed by Yanolja to mislead consumers.

Benefits of Increased OTA Regulation

Stronger regulation of OTAs offers several benefits:

Enhanced Consumer Protection: Consumers benefit from more transparent pricing, accurate information, and a fairer marketplace.

Increased Competition: Fairer competition among lodging providers leads to lower prices and better quality services.

Improved Trust & Transparency: Increased transparency builds trust between consumers, lodging providers, and OTAs.

Enduring Growth of the Hospitality Industry: A level playing field fosters sustainable growth and innovation within the hospitality sector.

Practical Tips for Consumers Booking Accommodation Online

* Compare Prices Across Multiple Platforms: Don’t rely solely on one OTA