[Invest&Law] 47 Billion vs 10 Billion... OTT vs Eumjeohyeop Copyright Fee Clash

Civil Suit Filed Over Music Copyright Infringement
Dispute Over Compensation Amount Heads to Court
"Debate Over Calculation Method to Continue"

The Korea Music Copyright Association (KOMCA), which filed a civil lawsuit against the domestic online video service (OTT) Wave, has reportedly demanded nearly 50 billion KRW in damages. On the other hand, Wave maintains that the amount payable to KOMCA is less than 10 billion KRW.

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According to industry sources on the 4th, KOMCA recently filed a lawsuit at the Seoul Central District Court against Wave for unauthorized use of copyrighted works managed by the association. KOMCA claims that Wave must pay a total of 47 billion KRW, including 40 billion KRW in unpaid music copyright fees over 12 years (2011?2022) plus a 15% late payment penalty. KOMCA stated that the unpaid usage fees were estimated by applying copyright fee calculation standards based on publicly disclosed sales and subscriber numbers. A KOMCA official said, "There has been a significant difference in opinions regarding the compensation amount during negotiations so far. We filed the lawsuit to receive a court judgment."

Wave rebutted KOMCA’s estimate, saying it differs significantly from reality. A Wave representative stated, "Original content, which is excluded from music copyright fees, contributes significantly to sales, so KOMCA’s estimate appears exaggerated." They added, "Since there are many movies and foreign series that do not incur copyright fees, we hope KOMCA will stop the excessive lawsuit and return to the negotiation table."

Previously, the Ministry of Culture, Sports and Tourism approved KOMCA’s proposed revision to the music copyright fee collection regulations in 2020. The revision set the OTT music copyright fee rate at 1.5% in 2021, increasing to 1.9995% by 2026. This rate is relatively higher compared to comprehensive cable TV operators (0.5% of total broadcasting revenue) and IPTV (1.2% of sales). In response, OTT companies such as Wave, TVING, and Watcha filed an administrative lawsuit against the Ministry of Culture, Sports and Tourism in 2022, opposing the government’s copyright fee increase policy, but ultimately lost the case at the Supreme Court in January last year.

KOMCA is also pursuing a criminal lawsuit against OTT companies for copyright infringement. Although the police found no intent in KOMCA’s criminal complaint, KOMCA requested supplementary investigation after a non-prosecution decision, leading the prosecution to decide on a reinvestigation. Baek Se-hee, lead attorney at the Art& Law Office, predicted, “Since the OTT side does not seem to deny the obligation to pay itself, the civil lawsuit will mainly focus on disputes over the base amount and calculation method of the copyright fees.”