[The Editors' Verdict] Allow Game Self-Regulation

During the Japanese colonial period, the Japanese Government-General of Korea did not permit dance halls in Joseon, citing reasons such as national instability. An article titled "Allow Dance Halls in Gyeongseong," written by women affiliated with a record company and published in the 1937 magazine Samcheolli, was a petition to the Government-General of Korea but can be understood as an effort to gain institutional freedom in Joseon. It lamented the fact that dance halls, which existed in cities of other countries, were uniquely prohibited in Joseon and petitioned to be allowed to dance in dance halls.

Last year, the Korea Fair Trade Commission (KFTC) issued an administrative notice proposing amendments to the regulations on providing information about goods and services in e-commerce. The main content of the amendment is to impose an obligation on businesses to provide consumers with information about the types of goods available and the supply probability for each type when selling probability-based products. The KFTC's basic position and legislative intent is that probability-based items in games are included in these probability-based products. However, the KFTC's amendment is a prime example of a severely flawed government regulation.

First, a much higher level of voluntary disclosure of probability information is already applied to probability-based items in games than what the amendment requires. Voluntary regulation of probability-based items in games has been developing since 2015, when the Korea Game Industry Association led the disclosure of probability information for such items, followed by the 2018 expansion of the scope of disclosure and unification into disclosure of individual item probabilities, and the launch of the Korea Game Policy Self-Regulation Organization, a game self-regulatory body, in 2018. Converting this voluntary regulation in the gaming sector into government regulation is a step backward in history. Government regulation is not a panacea in game services provided worldwide, and the outdated notion that government regulation solves all problems is mere armchair theorizing.

Second, from the moment the KFTC's amendment is implemented, the level of regulation on probability-based items in games will decline, contradicting the stated purpose of inducing rational consumer choice. When a high level of voluntary regulation and a lower level of government regulation coexist for the same subject, the overall regulatory level naturally falls. From the perspective of the regulated businesses, they only need to comply with government regulations subject to official sanctions and have no incentive or necessity to comply with the costly higher-level voluntary regulations. Therefore, government regulation should not interfere in areas where voluntary regulation is applied. Only when the level of voluntary regulation is lower than social demands does government regulation gain justification and effectiveness.

Third, the KFTC's amendment cannot guarantee the effectiveness of regulation on probability-based items in games. Currently, an independent game self-regulatory organization continuously monitors compliance with voluntary regulation of probability-based items in games. For any regulation to be effective, continuous monitoring of compliance and sanctioning of violators are necessary. This requires significant human and material resources for monitoring and reviewing violations. There has been no indication of how the KFTC plans to monitor compliance with the amendment or what detailed criteria it will use to review violations.

Fourth, voluntary regulation is also a form of 'regulation.' It actually serves as a substitute or complement that can resolve issues of legitimacy and effectiveness of government regulation. The government's denial of the meaning and necessity of voluntary regulation and the eradication of already functioning voluntary regulation is an outdated approach that does not fit the current smart era. At the very least, it shows a lack of understanding of voluntary regulation. For overseas businesses without domestic servers, government regulation is powerless and unintentionally causes reverse discrimination against domestic businesses.

Did not President Moon Jae-in express during his candidacy that game regulation should be based on industry self-regulation? The National Assembly Legislative Research Office's report also highlighted the need to expand game self-regulation. While the industry is becoming increasingly smart, it is very regrettable that the government seems unable to keep up with the industry's trends. The Korea Fair Trade Commission must immediately withdraw the amendment. "Allow game self-regulation!"

Hwang Seong-gi, Professor at Hanyang University Law School / Chairman of the Korea Game Policy Self-Regulation Organization