TikTok in trouble over "stealth marketing" in Japan

A new report says that TikTok has admitted to posting videos on Twitter without telling the audience that they were sponsored content, in breach of marketing guidelines in Japan.

Nikkei Asia reports:

The Japanese operator of the popular video-sharing app TikTok has admitted it posted videos on Twitter without informing the audience about the sponsored content, a practice that may have violated industry guidelines against stealth marketing.

This arrangement started about two years ago and stopped at the end of 2021, the Japanese subsidiary of TikTok owner ByteDance said on Monday. It added that it regretted giving consumers the wrong impression.

The report is clear that while there are no Japanese laws that ban stealth marketing, there is a "voluntary code from an industry group" which forbids the practice as it is considered misleading to consumers. A ByteDance representative in Tokyo reportedly told Nikkei that undisclosed payments were made to influences "for the purpose of spreading TikTok content", as such it seems these videos should have been labeled as such but weren't, giving off the impression that they were, in fact, word-of-mouth campaigns rather than paid content. In a similar report Japan Times notes that ByteDance said the practice had been in use since December, but had not been aimed at increasing app download "and therefore it thought that it was not obliged to clarify that the videos were intended for public relations activities." The company also said in its statement that the measure could have mislead users and that it would take necessary measures to stop it happening again.

One marketing group president told Nikkei the matter was "extremely problematic for platforms with high user volumes to engage in practices that are confused for normal word-of-mouth campaigns" and that the incident "could cause the entire industry to lose credibility." While it is considered one of the best iPhone apps around (and certainly one of the most popular), TikTok has come under pressure from rival services like YouTube's Shorts and Instagram Reels, with the report noting that some observers believe increased competition is pressuring TikTok into "secretly" paying influences to share content.