Overseas Game Companies' Domestic Agent Designation System... Effectiveness in Doubt Even Before Starting

[Asia Economy Reporter Kang Nahum] The introduction of a ‘Domestic Agent Designation System’ to prevent the ‘reckless’ operations of overseas game companies is coming into view, but doubts about the effectiveness of the system are already being raised.

According to the ‘Act on the Promotion of the Game Industry’ amendment bill currently under discussion in the National Assembly on the 26th, a domestic agent designation system for overseas game operators has been newly established. This is in response to criticisms that even if users have complaints about games produced or distributed by overseas game operators, it is difficult to contact them due to language barriers, and it is practically difficult to impose sanctions even if damages occur.

Until now, overseas game companies only needed approval from platform operators to service mobile games domestically, and since most were foreign corporations, it was difficult to punish illegal acts under domestic law. In particular, Chinese games have faced much criticism for ‘Mukttwi’ (eating and running) behavior, such as provocative advertising, inducing excessive payments, and unilaterally terminating services within less than a year after launch.

With the establishment of a legal basis to hold overseas operators accountable, it is expected to contribute significantly to protecting the rights and interests of domestic users. However, questions remain about whether the provision will be effective. Because the penalty level is low, even if the domestic agent fails to fulfill their duties, it is difficult to take substantial punitive measures against the overseas operator.

This can be seen in the case of the Information and Communications Network Act, which specifies the domestic agent designation system for overseas operators. According to the ‘User Protection Work Related to Domestic Agent Designation Request for Data Submission and Progress of Corrective Actions’ received by Deputy Speaker Kim Sang-hee from the Korea Communications Commission in October last year, the KCC did not request any data or corrective actions from domestic agents after the system was implemented. The number of times domestic agents submitted related documents to the KCC was also zero. This points to the domestic agent system being ineffective.

A representative from the Korea Game Industry Association pointed out, "Only fines of up to 10 million won are imposed as sanctions without strong measures such as heavy fines or service blocks, so it is questionable whether the domestic agent designation system will be effective for overseas game operators without business establishments in Korea." He added, "The issue of reverse discrimination between domestic and overseas game operators, where sanctions under the Game Industry Act depended on the presence of a domestic business establishment, has still not been resolved at all."