Fair Trade Commission investigates Tesla’s exaggerated ads

It has been reported that South Korea’s Fair Trade Commission (FTC) is reviewing U.S. carmaker Tesla’s exaggerations about its self-driving driving technology in ads as controversy was created after a German court ruled that Tesla used false information in ads.

The FTC has had a review of Tesla’s use of words in ads to see if any violation of the Act on Fair Labeling and Advertising occurs when Tesla uses the word “auto pilot” to promote its self-driving technology, according to a source who is related to the industry. Auto pilot means that a car is able to automatically control its direction, accelerate speed and stop driving. It has been pointed out that such a technological degree is close to driving assistance rather than to autonomous driving.

A regional court in Munich, Germany, ruled on Tuesday (local time) that Tesla misled consumers on auto pilot by implying that its car model is fully self-driven. South Korean civic group Citizens United for Consumer Sovereignty mentioned the German ruling on Friday while calling on the FTC and the Ministry of Land, Infrastructure, and Transport to start an investigation on Tesla’s ads.

The FTC has not concluded the review yet but is currently reviewing the case. It has been reported that some insiders in the FTC do not see that it is subject to investigation.

“There is not any clear definition written in law of autonomous driving,” said a governmental official. “It is hard to judge some tricky parts according to the Act on Fair Labeling and Advertising.”


woo@donga.com