Wavve, TVING, Watcha - Ministry of Culture Lawsuit Over Music Copyright Fee
Collection Regulation Amendment
Ruling Scheduled for 23rd
KT and LGU+ Also Watching Outcome After Loss
[Asia Economy Reporter Cha Min-young] The lawsuit results regarding the OTT music copyright fee collection regulation filed by three companies?Wavve, TVING, and Watcha?against the government are expected to be announced on the 23rd. Given that KT and LG Uplus, who engaged in similar legal disputes with the Ministry of Culture, Sports and Tourism (MCST), previously lost their cases, the likelihood of a win is not considered high.
The Seoul Administrative Court is scheduled to deliver the first-instance ruling on the "Cancellation of Approval of the Amendment to the Music Copyright Usage Fee Collection Regulation" lawsuit filed by three domestic online video service (OTT) providers against the MCST on the 23rd. This marks the initial conclusion of the legal battle that has lasted for over two years since early 2021.
The issue originated when the MCST approved the amendment to the music copyright usage fee collection regulation submitted by the Korea Music Copyright Association (KOMCA) in 2020. The amendment set the OTT music copyright usage fee rate at 1.5% in 2021, with a planned increase to 1.9995% by 2026. For comprehensive cable TV operators (SO), the rate was set at 0.5% of total broadcasting revenue, and for IPTV, 1.2% of sales.
The three OTT companies raised concerns that the rates were excessively high compared to other media such as IPTV and cable TV. They also viewed the MCST’s approval of the amendment, which contained unilateral claims from KOMCA, as problematic. They argued that the MCST violated procedures during the approval process.
The court is expected to side with the MCST. This is because KT and LG Uplus, which own the OTT services "Season" and "U+ Mobile TV" respectively, lost a similar lawsuit against the MCST in November. The court ruled that the MCST, as the competent authority, did not commit any illegal acts such as abuse of discretion or procedural violations. Therefore, it is widely believed that the ruling for the three OTT companies and the MCST will contain similar conclusions.
Within the industry, there are criticisms that the court is focusing on passive judicial rulings. Lawyer Jeon Eung-jun of Law Firm Lin stated at the "Forum on Institutional Improvement for Strengthening K-Content Competitiveness," hosted by Democratic Party lawmaker Lee Sang-heon and the Media Future Research Institute on the 15th, "It is questionable whether it is appropriate for the plaintiff OTT operators to bear the burden of proving the abuse or deviation of discretion under the general legal principles of discretionary cancellation. If it were a damages case due to copyright infringement, the copyright holder KOMCA should be the one to prove the reasonableness of the usage fee rate."
Meanwhile, KT and LG Uplus, who are considering appeals, are closely monitoring the trial developments. Another variable is whether KT will participate in the trial. Since TVING absorbed KT Season, the operator of Season, on December 1 this year, KT, which is terminating the Season service, has lost the incentive to participate.
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