Supreme Court Confirms Fine for Ondisk Operator for Aiding Distribution of Obscene Materials

"The Corporation Can Be Punished Even If the CEO Is Not Penalized Due to Dismissal of Charges"

Supreme Court, Seocho-dong, Seoul.

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The webhard site Ondisk's operating company has been sentenced to a fine for aiding and abetting the distribution of obscene materials.

The company’s CEO, who was indicted together, was exempted from punishment by a dismissal ruling on the grounds that he had already been prosecuted and sentenced for crimes related to the current charges under the principle of comprehensive offenses. However, the corporate entity was punished according to the dual punishment regulation.

On the 17th, the Supreme Court’s 3rd Division (Presiding Justice Ahn Cheol-sang) upheld the original court ruling that sentenced the Ondisk operator BNCP Co., Ltd. to a fine of 10 million won for aiding and abetting the violation of the Information and Communications Network Act (distribution of obscene materials).

The court stated, "Regarding the dual punishment regulation, the part related to the corporation’s representative punishes the corporation based on the representative’s responsibility, but it does not require that the representative be specifically punished."

Additionally, the court added regarding the violation of the 'Act on Promotion of Movies and Videos' added through an indictment amendment during the second trial, "There is no particular problem with the lower court’s judgment that the representative’s actions correspond to the distribution of video materials."

Mr. Kim, CEO of BNCP, was prosecuted on charges of aiding and abetting the distribution of 29 obscene videos containing explicit sexual acts on Ondisk from July 29, 2016, to July 3, 2017, despite knowing about the large volume of obscene videos being distributed and failing to take appropriate measures such as hiring sufficient personnel to prevent it.

BNCP was indicted alongside Kim under the dual punishment regulation of the Information and Communications Network Act, which punishes both the representative and the corporation.

Article 75 (Dual Punishment Regulation) of the Information and Communications Network Act states, "If the representative of a corporation or the corporation itself, or an agent, employee, or other worker of an individual commits a violation under Articles 71 to 73 or Article 74 Paragraph 1 in relation to the corporation’s or individual’s business, the corporation or individual shall be fined in addition to punishing the offender. However, this does not apply if the corporation or individual has exercised reasonable care and supervision to prevent the violation in relation to the business."

The first trial court dismissed charges against Mr. Kim.

Kim was previously prosecuted in March 2016 for aiding and abetting the distribution of dozens of obscene materials on Ondisk and was fined 5 million won in January 2018, a sentence confirmed by the Supreme Court in December of the same year. The current charges were recognized as being in a comprehensive offense relationship with the crimes for which the sentence was confirmed.

A comprehensive offense refers to multiple acts that collectively constitute a single crime under one legal element.

The Supreme Court has held the position that "when multiple acts corresponding to the same crime are continuously committed under a single and continuous intent over a certain period and the protected legal interest is the same, these acts should be treated as a comprehensive offense and punished as one, which also applies to accomplices."

Furthermore, the Supreme Court’s stance is that "if a judgment is finalized for some of the crimes in a comprehensive offense relationship, the principle of res judicata applies to the crimes committed before the judgment at the time of the factual trial, and a dismissal ruling should be issued."

In Kim’s case, he was prosecuted for crimes committed between July 2016 and July 2017, before the first trial judgment in 2018, and since these crimes were committed continuously with the same intent as the previously prosecuted crimes under the same crime name, a separate guilty verdict could not be issued.

The first trial court also acquitted BNCP.

During the trial, the company’s lawyer argued that since Kim received a dismissal ruling, the company should also receive a dismissal ruling under the purpose of the dual punishment regulation.

However, the court rejected this, stating, "The punishment of a corporation under the dual punishment regulation is not dependent on the punishment of the corporation’s representative who committed the prohibited act but is independently imposed due to the corporation’s own negligence in appointment and supervision of its representative. Therefore, the establishment of the representative’s crime or punishment is not a prerequisite for punishing the corporation."

However, the court judged that based on the evidence submitted by the prosecution alone, it was difficult to conclude that Kim aided and abetted the distribution of obscene materials or had the intent to do so, and thus the charges against the company lacked proof of criminal facts.

Considering that the company signed a contract to provide harmful content blocking services on May 24, 2016, and that it regularly took technical measures to prevent the distribution of obscene materials, such as deploying dedicated monitoring personnel, setting prohibited words, operating a warning message system, and retaining log information, resulting in setting about 858,000 prohibited words and deleting about 38,500 contents from September 1 to September 10, 2017, the court reached its conclusion.

The prosecution appealed the acquittal except for the dismissal ruling against Kim.

During the appeal trial, the prosecution requested and obtained court approval to amend the indictment, changing the charge of aiding and abetting the violation of the Information and Communications Network Act (distribution of obscene materials) against the company to a violation of the Movie and Video Act (distribution of unrated video materials).

The second trial court overturned the first trial’s acquittal of the company, stating, "Defendant BNCP Co., Ltd. aided and abetted by failing to take appropriate distribution prevention measures regarding the company’s business, allowing an unspecified number of members to distribute obscene videos through the information and communications network and to provide or display unrated video materials for distribution."

The court sentenced BNCP to a fine of 10 million won, considering that "distribution of obscene materials via the information network has high accessibility and propagation potential, adversely affecting users and causing social harm; the defendant company has a history of punishment for similar crimes; it appears to have gained significant profits from distributing obscene materials; and other sentencing factors such as the company’s business status, environment, motive, means, and results of the crime as revealed in the trial."

The court also ordered the company to pay a confiscation amount of 1,566,630,000 won.

The court explained, "It is insufficient to recognize that defendant Kim took all possible measures to prevent or stop the distribution of obscene materials considering the technology level and social norms at the time of the crime, and there is no other evidence to support this."

The court based its judgment on the following: ▲ The videos related to the charges were easily identifiable as obscene from their titles or preview images but were left unattended until the victim requested deletion ▲ The site operated by the defendant company had frequent distribution of obscene materials among members because the number of uploads directly affected sales ▲ Although the defendants implemented prohibited word filtering and file filtering, these measures were easily circumvented and limited in preventing distribution, and filtering was not properly done in practice ▲ Merely deploying dedicated monitoring personnel and contracting with filtering companies does not suffice as prevention measures, yet many obscene materials were found as stated in the charges ▲ Some employees, including the business director, directly participated in distributing obscene materials to maximize sales.

The company argued that videos uploaded and downloaded through the webhard do not qualify as 'video materials' under the Movie and Video Act, but the court rejected this, stating, "The obscene videos uploaded to the site are works stored on digital media, produced to be played or viewed and heard by mechanical, electrical, electronic, or communication devices, and thus qualify as 'video materials.'"

The court also rejected the claim that the company should receive a dismissal ruling because CEO Kim received one, for the same reasons as the first trial court.

The Supreme Court found no problem with the appeal court’s judgment and dismissed both the prosecution’s and BNCP’s appeals.

A Supreme Court official stated, "This ruling is the first Supreme Court decision clarifying that under the dual punishment regulation, the part related to the corporation’s representative punishes the corporation based on the representative’s responsibility, but does not require that the representative be specifically punished."