Samzzomzzam Cleared of Charges, But Professional Associations Continue Complaints... Obstacles to Innovation

Samzzomzzam and LawTalk Both Ruled 'Legal'
Conflicts Continue Due to Additional Complaints from Professional Associations
Government Urged to Act as Mediator in Industrial Disputes

The tax refund platform Samzzomzzam, which had been reported for allegedly violating the Certified Tax Accountant Act, has been cleared of all charges by the Supreme Prosecutors’ Office. However, related conflicts show no sign of abating. The Korea Association of Certified Public Tax Accountants, which led the complaint, announced that it would continue to raise legal objections, stating that "illegality remains regardless of the prosecution’s legal judgment." Despite the investigative authorities’ decision, the risk of ongoing disputes has not been resolved, leading some to suggest that the government should step in to mediate.

According to industry and legal sources on June 16, the Supreme Prosecutors’ Office dismissed last month the appeal filed by the Korea Association of Certified Public Tax Accountants against Jarvis & Villains, the operator of Samzzomzzam, regarding alleged violations of the Certified Tax Accountant Act. The police had previously decided not to indict, effectively bringing to a close the legal battle that began in 2021 and lasted over four years.

However, the association maintains that controversy over the illegality of Samzzomzzam still remains. They argue that Samzzomzzam’s tax agency brokerage service, "SamzzomzzamTA," constitutes illegal advertising and proxy activity using the names of certified tax accountants, and have continued to file additional complaints since last year. In response, Jarvis & Villains countered, "This service is simply an advertising platform that connects tax accountants and taxpayers, and the commission is received from the tax accountants."

This is not the first time that repeated complaints from professional associations have disrupted the business models of startups. A recent precedent is the legal service platform LawTalk, which struggled for eight years from 2015 due to legal conflicts with the Korean Bar Association. Although it was determined that there were no legal issues, resistance from established professional organizations with vested interests hindered business operations, making the situation similar.

Startups exposed to attacks from professional organizations with overwhelming financial and social influence are often forced to manage risks for years, making it difficult to operate services normally. This, in turn, has been consistently pointed out as a factor that can ultimately hinder industrial innovation.

This is why there are growing calls for such conflicts to be resolved through a social system rather than being left as mere disputes between companies. There is a growing opinion that the government should play a more active role as a mediator in conflicts that arise during periods of industrial transition.

The industry is paying attention to President Lee Jaemyung’s campaign pledge. President Lee has previously stated that he would create a public forum involving stakeholders to mediate conflicts between existing and new industries, and that the government and National Assembly would form a consultative body. The platform industry is expressing hope that this policy direction could provide an institutional foundation to ease recurring conflicts.

Lee Jiyoung, a senior advisor at Startup Alliance, said, "This should be seen as a social system issue, not just a conflict between individual companies. Startups ultimately have to compete with global platforms, but if they are blocked by domestic vested interests, it will be difficult for them to expand globally." She emphasized, "A public arbitration mechanism must be established with a focus on new industries, and it is time for the government to clarify its stance on such conflicts."

Kang Hyunggu, a professor at Hanyang University’s Department of Finance and Business, stated, "The very structure in which innovation is repeatedly hindered is a problem. Politics must design mediation mechanisms that accommodate the demands of various stakeholders."