Korea Music Copyright Association Together Files Complaint Over "Opaque Royalty Management"
Korea Music Copyright Association Counters: "Funds Held in Escrow, Claims Are Distorted"
The Korea Music Copyright Association and the Korea Music Copyright Association Together have come into direct conflict over residual copyright fees (residual royalties) from YouTube amounting to over 100 billion won. As the Korea Music Copyright Association Together raised suspicions of non-transparent management by the Korea Music Copyright Association and filed a criminal complaint, the Korea Music Copyright Association countered by stating that these were "distortions of the facts."
On October 15, the Korea Music Copyright Association Together stated in a press release, "The Korea Music Copyright Association received more than 100 billion won in residual royalties from Google, the operator of YouTube, but kept this money in the association's account for several years without disclosing it externally." They also claimed, "The association distributed the money only to its internal members and did not pay legitimate royalties to other trust organizations." Furthermore, they pointed out, "It is structurally unfair that Google, despite both organizations being equally approved by the Ministry of Culture, Sports and Tourism, paid the entire amount only to the Korea Music Copyright Association without any consultation with the Korea Music Copyright Association Together."
'Residual royalties' refer to leftover copyright fees generated from music works used on YouTube when the rights holders are unidentified or have not claimed them within a certain period (two years). Google classified unclaimed amounts as 'residuals' and paid approximately 102.7 billion won to the Korea Music Copyright Association over seven years since 2016. Of this amount, 29 billion won was paid to members, only 770 million won to non-members, and the remaining 73.6 billion won is reportedly still held by the association.
Regarding this issue, the Korea Music Copyright Association Together filed a lawsuit in February against the Korea Music Copyright Association seeking restitution of unjust enrichment, and last month filed a criminal complaint and accusation for occupational embezzlement under the Act on the Aggravated Punishment of Specific Economic Crimes. They also announced plans to report Google's business practices to the Fair Trade Commission.
In response, on October 16, the Korea Music Copyright Association issued a statement asserting, "Residual royalties are not the association's assets, but rather funds held in escrow to be paid out when rights holders make claims." They refuted the allegations, stating, "It is not true that the Korea Music Copyright Association infringed on the rights of other organizations or monopolized royalties."
The association explained, "The relevant funds were temporarily deposited with the association by YouTube because the rights holders could not be identified, and a significant portion of these royalties pertain to works managed by the Korea Music Copyright Association." They added, "Although the Korea Music Copyright Association Together signed a direct usage agreement with Google in 2016, they did not claim royalties themselves, which is why the amounts were classified as residuals. Omitting these circumstances and framing it as a monopolistic act by the Korea Music Copyright Association is a distortion of the facts."
They further stated, "We have already provided the basis for settlement between multiple organizations to the Korea Music Copyright Association Together via official correspondence, but this fact was omitted in some reports." The association acknowledged, "Although there was no separate legal obligation to notify, we recognize our social responsibility for not being more proactive in disclosing this information."
The Korea Music Copyright Association announced that, starting October 17, it will officially begin the process for rights holders to claim YouTube residual royalties. The association will provide guidance on how to claim through its website, the Ministry of Culture, Sports and Tourism, and the Korea Copyright Commission. They are also considering a plan to settle claims through individual verification procedures if certain requirements are met, even if the statutory period of extinction (10 years under civil law) has passed. The association also clarified, "Since the third quarter of 2022, we have not received any residual royalties."
The Ministry of Culture, Sports and Tourism has issued a corrective order to allow musicians to directly check and claim copyright fee details generated by Google. Kim Kyoheung, Chairman of the Culture, Sports and Tourism Committee, urged institutional improvements, stating, "The management responsibilities of relevant agencies must be strengthened."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
