[Reverse Discrimination Caused by Regulation] Game Law Revision Ignores Overseas Residents?... Only Tightening Restrictions on Us

Mandatory Display of Probability-Based Items Included
"99% Compliance by Domestic Companies... Infringement on Business Freedom"

[Asia Economy Reporter Kang Nahum] Concerns are growing within the gaming industry over the full revision bill of the Act on Promotion of the Game Industry (Game Act revision bill), which is scheduled for review by the National Assembly's Culture, Sports and Tourism Committee. The bill includes a provision to mandate the disclosure of probability-type items, raising concerns that the issue of 'reverse discrimination' between domestic and overseas game companies will worsen. Additionally, there are criticisms that it may excessively infringe on business freedom.

According to the National Assembly's legislative information system on the 16th, the Game Act revision bill was proposed on December 15 last year, with Lee Sang-heon of the Democratic Party of Korea as the lead sponsor. The revision bill includes ▲simplification of the rating classification process ▲mandatory disclosure of probability-type items ▲designation of domestic agents for overseas game companies ▲exemption from rating classification for non-profit games ▲financial support for small and medium-sized game companies.

In particular, regarding the mandatory disclosure of probability-type items, game developers or distributors must display the rating, game content information, types of probability-type items, and supply probability information by type when distributing or providing the game to users. Violations of this provision may result in imprisonment for up to two years or a fine of up to 20 million KRW.

The industry's view on this provision is uncomfortable. Even under the current voluntary regulation system for disclosing probability-type items, most domestic game companies comply well, but overseas game companies do not participate properly. According to the 'December 2020 Voluntary Regulation Monitoring Results' report released by the Voluntary Regulation Evaluation Committee under the Game Rating and Administration Committee (GRAC), the compliance rate for probability-type item disclosure among domestic game companies was 99.9%, whereas overseas game companies only complied at a rate of 60.4%. There are concerns that mandating the disclosure of probability-type items may further exacerbate the imbalance between domestic and overseas game companies.

There is also criticism that this provision excessively infringes on business freedom. The Korea Game Industry Association submitted an opinion letter regarding the Game Act revision bill to ruling and opposition party members of the Culture, Sports and Tourism Committee the day before. In the letter, the association pointed out, "The Game Act revision bill is skewed towards regulation rather than industry promotion," and added, "It excessively infringes on business freedom and is either ineffective or unlikely to be realized."

Specifically concerning probability-type items, the association argued, "Balancing aspects such as limiting high-spec items to below a certain ratio is one of the most essential parts for the enjoyment of the game. It requires significant investment in research and is a representative trade secret managed confidentially by operators," and stated, "Forcing full disclosure of probability information may restrict property rights as trade secrets."