"Unauthorized Collection of Copyright Fees Deemed Illegal"... KOSCAP's Fine of 144 Million Won Confirmed

KOMCA Loses Lawsuit Against MCST Over Fine Cancellation
Supreme Court Rules MCST's Supervisory Authority Is Lawful
Applying Criteria Other Than 'Management Rate' Deemed Illegal
Fine of 144 Million KRW Confirmed

The Supreme Court has ruled that the fine imposed by the Ministry of Culture, Sports and Tourism (MCST) on the Korea Music Copyright Association (KOMCA) for collecting excess usage fees from broadcasters is justified.

According to the MCST, the Supreme Court (1st Division, presiding Justice Seo Kyung-hwan) dismissed KOMCA's appeal against the cancellation of the fine imposition and confirmed on the 20th that the MCST's disposition was lawful.

Previously, on June 16, 2022, the MCST imposed a fine of 144 million KRW on KOMCA, judging that KOMCA had arbitrarily applied the 'Music Copyright Trust Rate' instead of the 'Music Copyright Management Rate' specified in the fee collection regulations when signing a usage contract with Gugak Broadcasting. This was deemed to fall under Article 109(1)(2) of the Copyright Act, which covers cases of receiving fees other than approved usage fees.

In response, KOMCA filed an administrative lawsuit on September 8, 2022, objecting to the disposition. KOMCA argued that the principle of freedom of contract applies to determining the usage rates and amounts for music works, and that the MCST's enforcement of the management rate was beyond the scope of its supervisory authority.

However, the first trial, the appellate court, and the Supreme Court all ruled in favor of the MCST. The appellate court stated that the exercise of supervisory authority by the MCST was a legitimate disposition considering the monopolistic and public interest status of copyright trust management organizations. It also judged that applying any criteria other than the management rate lacked justifiable grounds.

Jung Hyang-mi, Director of the Copyright Policy Bureau at the MCST, stated, "Reflecting the intent of this ruling, we will ensure that KOMCA returns the excess fees collected to the broadcasters, and we will strive to create a healthy copyright ecosystem through active coordination and mediation between copyright trust management organizations and users."