[Platforms Crushed by Regulation] Platforms Hit by Collateral Damage from Publisher and Author Issues... "Are There Two Fair Trade Commissions?"

Preventing the 'Geomjeong Gomu Shin Incident' but with Broad Content
"May Overlap with Fair Trade Act Leading to Duplicate Regulation"

[Image source=Yonhap News]

The regulatory fears of platform companies are not limited to the Platform Competition Promotion Act. The Ministry of Culture, Sports and Tourism is also pushing for the 'Munsan Act (Act on the Fair Distribution Environment of the Cultural Industry)' to prevent 'gapjil' by platform and culture-related companies against creators, which is seen as a significant burden. The Munsan Act has broad regulatory targets and prohibitions, and since the announcement of the Platform Act, industry voices expressing greater concern about the enactment of the Munsan Act than the Platform Act have been growing.

According to the related industry on the 10th, the Ministry of Culture, Sports and Tourism is promoting the enactment of the Munsan Act. The Munsan Act gained attention in connection with the passing of the late Lee Woo-young, the creator of 'Black Rubber Shoes.' After Lee Woo-young took his own life amid a copyright lawsuit with a publisher, both ruling and opposition parties pushed to correct unfair practices, and the Ministry of Culture, Sports and Tourism prepared an alternative. However, the bill has not passed the Legislation and Judiciary Committee due to overlaps with laws under other ministries' jurisdiction. The Ministry plans to revise and resubmit the bill through coordination with the Korea Communications Commission and others, but the industry fears it will result in double regulation considering the promotion of the Platform Act.

The biggest problem with the Munsan Act is the ambiguity of its regulatory targets. It regulates related businesses under broad concepts such as cultural industry and cultural products. This means that all businesses engaged in areas related to major webtoon platform companies like Naver Webtoon, online video service (OTT) providers such as Netflix, TVING, WAVVE, and further to film, video, broadcast video, music, games, publishing, and printing could be subject to regulation. Since the issue with the late Lee Woo-young was between the publisher and the creator, including all platform companies in the regulation is considered excessive.

An industry insider emphasized, "For domestic content to be fully established as a global mainstream, a detailed approach is essential to grow each industry with expertise, long-term vision, and by sector," adding, "The regulatory targets are excessively broad like 'earrings that fit the ear,' and the characteristics of each industry are not reflected."

There is also criticism that the ten prohibited acts applicable to cultural product businesses do not fit reality. The prohibited acts include interference with production activities, refusal to accept cultural products, coercion to provide technical data or information, demands for rework after delivery, and passing on costs of sales promotion and price discounts, with the prohibition on passing on sales promotion and price discount costs being particularly problematic. In the webtoon industry, a business model is used where early episodes are released for free to induce paid subscriptions later, but this could face restrictions. Since free episodes do not generate revenue, creators do not receive profit distribution.

The Ministry of Culture, Sports and Tourism plans to specify details through subordinate legislation such as enforcement decrees. However, experts argue that since the Fair Trade Act already regulates various unfair trade practices, there is no need to enact the Munsan Act additionally.

Professor Lee Seung-min of Sungkyunkwan University Law School stated, "Unfair trade practices using transactional status and abuse of market dominance are already punishable under the Fair Trade Act," emphasizing, "If the Munsan Act imposes similar regulations on the broad category of cultural products, it will inevitably lead to overlapping regulations, effectively creating two Fair Trade Commissions."