The Media and Entertainment Law Review: South Korea

Overview

i Overview of the Korean media and entertainment industry

The Korean media and entertainment industry comprises different branches that include print and visual media.

The Korean commercial broadcasting industry is broadly categorised into terrestrial broadcasters, cable TV broadcasters, internet TV provided by telecommunications operators and satellite broadcasting operators. In the past, terrestrial broadcasters and cable TV broadcasters held a dominant share of the Korean commercial broadcasting market, but this landscape is rapidly changing with the growth of internet TV broadcasters.

In the area of print media, the newspaper industry is considered to be the largest and most significant sector, although the size of this market continues to decrease with the development of visual broadcast media.

Finally, the Korean entertainment industry encompasses different forms of media, including films, videos, music, games and cartoons, and is currently thriving with the rise of K-pop and a growing interest in Korean films. Domestically, businesses involving Korean games and internet cartoons (or 'webtoons') have also seen substantial growth. The over-the-top (OTT) media market, led by global service providers such as Google's YouTube and Netflix, is also dramatically expanding in Korea.

ii Recent market trends and policy developments

Change in market trends due to covid-19

The covid-19 pandemic has globally led to a stagnation in in-person commerce and a rise in virtual and digital commerce. Entertainment industries in Korea, such as performing arts and theatre-related businesses, were no exception to this trend. Such notable recent market trends in the Korean entertainment industry include the development of remote K-pop performances.

In the K-pop performance industry, several attempts were made to organise live virtual concerts. K-pop group BTS recently held a virtual concert on 14 June 2020, and 756,600 fans from all over the world tuned in to watch. Separately, CJ E&M, a major Korean media content company, organised a virtual concert on YouTube this year in June.

Acquisition of cable TV businesses by telecommunications operators

Recently, the top three telecommunications operators in Korea, SK Telecom (SKT), KT and LG U Plus (LG), all attempted to enter the rapidly expanding commercial broadcasting market by acquiring cable TV businesses. SKT completed the merger with its subsidiary SK Broadband and T-Broad, a system operator (SO), on 30 April 2020. LG also acquired the shares of CJ Hello vision, another SO, in 2020. KT, a major competing operator, was selected as the preferred bidder for Hyundai HCN's broadcasting communication business. The sale of other SOs such as D'Live and CMB is currently being discussed as well.

Legal and regulatory framework

In Korea, the different forms of media are regulated by different laws and regulations.

i Newspapers

The Act on the Promotion of Newspapers, etc. (Newspaper Act), which is regulated by the Ministry of Culture, Sports and Tourism (MCST), governs newspapers. Among other things, the Newspaper Act regulates business registration for newspaper businesses and prohibits foreigners or foreign entities from publishing newspapers in Korea.

To publish and distribute newspapers (including online newspapers), a business must complete registration with the corresponding local government. Furthermore, foreign newspaper businesses are required to establish and register a local Korean office or branch.

The Newspaper Act prohibits the publishing of any newspapers by foreign governments, companies or organisations; companies or organisations whose representative executive officer is a foreigner; and companies or organisations whose shares or equities are held by foreigners or foreign entities in excess of a threshold rate. The Newspaper Act further prohibits the publishing of online newspapers by foreigners.

ii Broadcast communications

Broadcast communications are governed by the Broadcasting Act and the Internet Multimedia Broadcast Services Act, the latter of which governs businesses delivering broadcasts through internet protocols, and both of which are regulated by the Korea Communications Commission (KCC) and the Ministry of Science and ICT (MSIT). Among other things, the acts regulate broadcasting operator licences and rating systems.

Broadcasting operators must either obtain a licence from the KCC, or obtain a licence or an approval or file a registration with the MSIT.

Korean television broadcasters are required to self-rate their programmes based on five elements that may be harmful to viewers (theme, violence, sexuality, imitation risk and language) before broadcasting the programmes, and must display the rating throughout the broadcast. The KCC assesses the appropriateness of the rating after a programme is broadcast.

iii Online media

Although there are no laws that specifically govern OTT or online media, the Telecommunications Business Act (TBA), which is regulated and enforced by the MSIT and the KCC, generally governs services provided through telecommunications technology. Among other things, the TBA imposes restrictions on telecommunication business operators, which includes value-added service providers (VSPs). There are also laws that regulate the management of personal information relevant to online media, which are not covered in this chapter.

VSPs must obtain approval from or file a report with the MSIT before operation. Online media services are normally required to report to the MSIT as VSPs.

iv Films

Films are governed by the Promotion of the Motion Pictures and Video Products Act. Among others, the foregoing Act regulates the film rating system and imposes a quota of Korean films on film theatres (called the screen quota system).

Film theatres are required to screen Korean films for at least 20 per cent of each business day.

Free speech and media freedom

i Protected forms of expression

Free speech

Freedom of expression is a right recognised by the Constitution of Korea. In Korea, freedom of expression encompasses the freedom of speech and press. The Constitutional Court has held that all forms and channels for communication and expression are protected by the right. Nevertheless, this right may be restricted based on the content of expression, including expressions that harm another party's reputation or infringe upon another party's rights.

Restrictions on freedom of expression

Recently, a string of Korean celebrities have committed suicide, which has presumably been due to malicious comments left on the internet, and for this reason, the need to restrict some forms of expression online has been reemphasised. Bills relating to the prevention of malicious comments, such as the 'quasi-real-name' policy, which discloses internet IDs and IP addresses on internet comments, were proposed at the National Assembly, and Naver and Kakao (Daum), Korea's two major portal sites, suspended the comment services in their entertainment news and sports news sections.

Broadcast communications

The KCC publishes the Regulations on Broadcasting Standards, and reviews broadcast communications after they have aired. The KCC also publishes the Regulations on Broadcast Advertisement Standards for advertisements. After a review of the content that was aired, the KCC may impose sanctions on the relevant broadcasting companies, programme providers or production companies when the content is not compliant with the above regulations.

Ratings

The Korea Media Rating Board requires films and videos to be rated by it before they are distributed through various channels. While there are broad exceptions to this requirement (e.g., free videos open to the public provided through telecommunications network are exempt from this requirement), if a person screens films or videos without a rating, or provides these films or videos in a way that is not compliant with the rating, such person may be subject to criminal sanctions. As mentioned in Section II.ii, broadcasters are required to rate their broadcast programmes and indicate the rating while broadcasting the programme.

Online regulations

The Act on Promotion of Information and Communications Network Utilisation and Information Protection, etc. (Network Act) prohibits the distribution of illegal content, including content that is obscene, injures another's reputation, or is greatly harmful to teenagers and juveniles. The KCC regulates accordingly by conducting an ex post review of the content. After the review, the KCC may issue a corrective order to the telecommunications service operator or the publisher of the content.

Regulations on hate speech

To date, there are no laws in Korea that regulate hate speech (i.e., speech that spurs animus towards a particular race, nationality or class of people). While Section 2 of the National Human Rights Commission Act considers any discriminatory actions against another party because of, inter alia, their sex or religion to be an infringement on his or her right to equality (as protected by the Korean Constitution), this law has little practical effect as there are no sanctions against violators under the law. In response, there have recently been moves to submit bills that regulate hate speech.

General civil and criminal regulations

Any infringements of another party's rights, such as reputation, privacy or image, may be subject to criminal and civil liabilities.

ii Newsgathering

There are no laws that provide immunity to liability for newsgathering. A recent lower court decision held that, notwithstanding the freedom of press, any actions by the press that are in violation of express laws are not protected, and that the legality of an investigative action by the press can only be determined after a balancing of the legitimacy of the purpose behind the action, the rights protected by the act, the rights infringed by the act, the commonality of the action and the exigency of the situation. A person who trespasses, secretly records a third party's conversation or commits other violations of law (or causes another person to commit any of the foregoing violations) for the purpose of newsgathering may be criminally liable. Under current law, a party to a conversation may legally record a conversation without the other parties' consent.

A recent lower court decision found a person who replayed a secretly recorded conversation (in which the person was a participant) civilly liable for violating the other party's voice rights (portrait rights). This case is considered noteworthy because, although secretly recording conversation is not illegal in Korea, the court found the party civilly liable because the person replayed the recording without modification or alteration (consequently holding that this replaying of the recording infringed upon the subject's portrait rights).

iii Freedom of access to government information

There are no laws that provide the media with special access to information. However, under the Official Information Disclosure Act, any Korean citizen, company or entity can request disclosure of any information held or managed by national or state agencies, local governments and local public enterprises (together, public agencies). A foreign individual can request information held or managed by public agencies only if he or she is domiciled in Korea, or is temporarily in Korea for academic research. A foreign company or entity can make the same request only if it has a domestic office or presence. Even then, in certain circumstances, such requests may be denied based on eight express exceptions specified under the law (e.g., infringements on an individual's or company's trade secrets that may materially harm that entity), in which case, an administrative action must be filed to reverse the decision.

Cases pertaining to information disclosure (and denials of requests thereof) are not all made public. Accordingly, only portions of a small number of court cases and appeals to the denial of requests for information are accessible. The most recent high-profile court case involving the issue of information disclosure was the denial of access to documents, such as reports on rescue activities, pertaining to the Sewol Ferry incident, which claimed the lives of 304 people. On 16 April 2014, the National Archives of Korea denied a request for disclosure of documents produced by the Blue House (the President's office) when the Sewol Ferry sank. On 21 February 2019, the Seoul High Court held that the documents should be kept confidential because they were part of the Presidential Archives designated under the Act on the Management of Presidential Archives and did not fall under an exception category specified thereunder. The case is currently pending at the Supreme Court.

iv Protection of sources

Any express laws that provided journalists with the right to remain silent to protect their sources have been abolished. Currently, there are no laws that expressly allow journalists to protect their sources, and it is unclear whether source protection falls under the umbrella of the constitutional right of freedom of expression (which encompasses the freedom of press and publication).

v Private action against publication

Main claims filed against the press

Under the Act on Press Arbitration and Remedies, etc. for Damages Caused by Press Reports (Press Arbitration Act), injured parties can file a claim against a media company for correction, a counter statement or further reporting. Correction requests are made to correct untrue statements published by a company. Counter statements are available irrespective of the truthfulness of a report. Further reporting requests are claims that can be filed by a person that was suspected of or prosecuted for a crime on a fact that he or she was later deemed to be innocent of or had had his or her charges dropped. These claims can be resolved by direct claim against a media company, mediation through the Press Arbitration Commission or litigation. If a report is false or materially harms the reputation of the subject and does not promote public interest, the injured subject can file for a request to delete the report.

Mediation through the Press Arbitration Commission

The Press Arbitration Commission is an alternative dispute resolution body that specialises in disputes involving press reports. The arbitration department is composed of judges, attorneys and ex-media personnel. A successful agreement between an aggrieved party (the petitioner) and a media company (the respondent) is legally binding under Korean law.

Civil suits

If a media company acts illegally, the aggrieved party can file for damages for economic harm or emotional distress, which needs to be proved by such party. Unlike the Press Arbitration Act, these suits can be filed against individual reporters.

Criminal suits

In Korea, if an aggrieved party's reputation is injured because of a media report, a criminal suit can be filed against the publisher and individual reporter regardless of whether the report is false or not. Potential safe harbours may exist for the publisher and individual reporter if the report can be proven to be both truthful and in the service of public interest (i.e., the publisher and the individual reporter may not be held criminally liable). For false reports, however, such safe harbour rule does not apply.

Defences for the press

Regardless of the truthfulness of a report, if a report harms an aggrieved party's reputation, the aggrieved party may take civil and criminal action against the publisher. The aggrieved party must prove that he or she was defamed by the report. However, if the report is found to be truthful and in the service of public interest, then the publisher may not be criminally liable. Furthermore, even if some information in the report is false, if the publisher believed the information to be true (and had reasonable grounds to believe so), and the report was published for the public good (i.e., in the interest of society or large groups of members of society), the publisher may not be held criminally liable. However, the burden is on the publisher to prove their beliefs. Both the Constitutional Court and the Supreme Court have held that the level of protection for a public figure or a case involving social issues is lower, which means that a report involving such figure or case is likely to be recognised as servicing the public good.

Intellectual property

i Copyright and related rights

Copyright law of Korea and its comparison to the Berne Convention

Under the Korean Copyright Act, both Korean and foreign copyrighted works are protected upon their creation in accordance with treaties that Korea has acceded to, which include the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention). The Berne Convention was ratified by Korea on 2 August 1996.

The Copyright Act has since been amended several times, and recent notable changes were intended to make the Copyright Act compliant with free trade agreements entered into respectively with the European Union and with the United States (together, the FTAs).

Korea is also a member of the World Intellectual Property Organization (WIPO), and is subject to the WIPO Copyright Treaty (WCT). Korea has complied with its duties under the WCT by reflecting necessary obligations in the Copyright Act.

Recent developments in copyright law

As mentioned above, recent notable changes were intended to make the Copyright Act comply with the requirements under the FTAs. First, the Act was amended to re-establish indemnification requirements for the secondary liability of online service providers (OSPs). Second, the scope of permitted reproduction was expanded to include temporary reproduction in accordance with the FTA entered into with the United States.

The expansion of the scope of copyrighted work is also a recent development in Korea's copyright regime. For instance, the Korean Supreme Court recently recognised that television programme formats can be regarded as work product and protected by copyright law for their distinct creativity in the particular selection and sequencing of programme elements (e.g., stage, background, props, music). The Supreme Court also held in another case that the rules of games (an element that comprises the game, previously viewed as ideas and not recognised as expressions protected by copyright) can be considered in determining the creativity of a work, which is a key element for copyrighted work.

ii Publicity rights

Currently, there are no laws or regulations in Korea that expressly recognise publicity rights for public figures, such as celebrities. Whether publicity rights should be recognised has been a frequently debated issue in Korea, but there are no Korean Supreme Court cases that provide clear guidance on this issue. However, the MCST is currently preparing a proposed amendment to the Copyright Act that may potentially introduce the concept of publicity rights through the amendments.

iii Unfair business practices

Lack of protection for 'hot news'

Coverage of hot news is not expressly protected under current copyright law or other relevant regulations. There are different views on whether hot news should be protected.

Current regulations regarding news articles

In Korea, news reports on current events are generally not protected under copyright law. However, in some exceptional circumstances, news articles may be recognised as work product protected by copyright law for their creativity or originality based upon their unique content, style and vocabulary. The Supreme Court has, therefore, held that the unauthorised publication of a news article by another third-party media company can be a violation of the Copyright Act.

Competition and consumer rights

i Overview

There are no laws or regulations that specifically govern competition and consumer protection in the media and entertainment industries. These industries are, however, subject to general competition and consumer rights laws and regulation, including the Monopoly Regulation and Fair Trade Law, which regulates trade among businesses, the Regulation on Standardised Contract Act (RSCA), which regulates standard contracts between consumers and business providers, and the Act on Consumer Protection in Electronic Commerce Transactions, which applies to online business providers and consumers.

ii Merger control

In April 2019, SK Broadband submitted a filing to the Korean Fair Trade Commission (KFTC) for the acquisition and business transfer of CAP, an OTT operating joint venture by three major terrestrial broadcasters. Through this acquisition, SK Broadband intended to launch a new OTT service by integrating its existing OTT service and CAP's OTT service. The KFTC conditionally approved said transaction and imposed corrective measures, including, inter alia, prohibiting changes to or terminations of existing video on demand supply agreements with other OTT operators without justifiable reasons, and required the business to negotiate in good faith on a reasonable and non-discriminatory basis. The decision took into consideration the fact that the three major terrestrial broadcasters are considered 'killer content' providers with a content market share amounting to 41.4 per cent.

iii Consumer protection

In its 2020 work plan, the KFTC has stated that it will focus its investigations on the terms governing termination or refund policies of subscriptions and sharing-economy services such as OTT. In January 2020, the KFTC required three internet protocol television (IPTV) service providers to correct the subscription video on demand clause to allow cancellations within seven days of a purchase if consumers have not watched any videos. In August 2020, the KFTC also examined the terms of four e-book platform providers and required the correction of 10 unfair clauses, including clauses that restricted consumers' rights to cancel or terminate contracts by not allowing refunds for arbitrary reasons determined by the service providers or by not allowing partial refunds during the month.

 

Digital content

Under the Copyright Act, both civil liability and criminal penalty may result from copyright infringement. Separately, under the Network Act, anyone who distributes illegal content, such as obscene content or defamatory content, through communication networks (such as the internet) may be subject to criminal liability. OSPs can be held secondarily liable for the aforementioned illegal activities by their users. However, OSPs will be exempt from such civil and criminal liability if a violation occurs without a website operator's knowledge, and notice and takedown actions are implemented pursuant to the Copyright Act's safe harbour provision or the Network Act.

Meanwhile, the Supreme Court has consistently held that simply providing links on the internet does not constitute copyright infringement, even if such links directly connect to individual copyrighted work, as such conduct merely provides the location of or a path to individual copyrighted work stored on the server.

Net neutrality and recent developments

In Korea, there are no express laws or regulations that mandate the net neutrality of online service providers (OSPs). However, several provisions in the TBA are known to be premised on the principle of net neutrality, and the MSIT has published two guidelines related to net neutrality.

Views on net neutrality differ between internet service providers and content and application providers. The advent of 5G networks has fuelled this already heated discussion. The MSIT research team is currently reviewing the specific conditions for providing managed services,

The KCC released the Guidelines on Fair Internet Network Use Agreements in December 2019, the intent of which is to prevent unfair reverse discrimination in the collection of network usage fees between domestic and foreign businesses, and to protect consumers during the process of network usage fee negotiations. However, the foregoing Guidelines are still silent on the obligation to pay network use fees, which pushed the National Assembly to amend the TBA. The amended TBA, which goes into effect on 10 December 2020, obligates VSPs of a certain scale to secure measures to provide stable services. Currently, the MSIT is preparing a presidential decree laying out the measures for service stability.

Contractual disputes

i Disputes between platforms and content providers

In contrast to the past when platforms held more bargaining power than content providers (CPs), due to the emergence of IPTV and OTT, the influence of CPs continues to increase. On 17 March 2020, CJ E&M, one of Korea's leading CPs, sent an official public letter to the paid broadcasting industry demanding a 20 per cent increase to its programme fees, and in response, a platform provider called D'Live stated that it could not agree to such demand. The parties had been unable to reach an agreement as of 31 August 2020, and the MSIT proposed arbitration for the parties. The number of disputes between platforms and CPs is expected to continue to arise.

ii Rights claims by music trust management organisations

The number of copyright claims by music trust management organisations such as the Korea Music Copyright Association (KMCA) has been increasing recently. The KMCA filed a complaint with the court against CGV, Korea's No. 1 movie theatre brand, on behalf of the UK's Performing Right Society in August 2019. The complaint argued that CGV should pay performance fees of 200 million Korean won in addition to music royalties for the film Bohemian Rhapsody. The KMCA is also in hot water with Korean OTT providers over the rate of music royalties.

iii Venues and resolutions

Petitioners generally seek damages and often challenge the validity of contracts in disputes involving the media and entertainment industry. In cases where copyright or trademark infringement is recognised, the infringing party may be held criminally liable. While parties mainly seek help from the court system in such situations, for minor disputes with consumers, another possible venue is the Dispute Resolution Committee of the Korea Creative Content Agency. If the issues are deemed confidential, the Korean Commercial Arbitration Board (KCAB) is another preferred venue. Parties have increasingly been using these two options in recent years; a decision from the KCAB is as effective as a court decision.

For entertainment work products, such as films or recordings, taking preventive measures is crucial because the timing of release is often vital in determining the success of a product. As such, preliminary injunctions are frequently sought, and during the development of the case for an injunction, the merits of the case are often reviewed thoroughly, which often leads to settlements of a dispute.

Year in review

The. most notable issue of 2020 may be the drastic decrease in the demand for public performances due to covid-19. As social distancing became the new normal due to covid-19, the demand for public performances naturally fell. On 19 August 2020, the Seoul metropolitan government banned public gatherings in high-risk facilities, which included indoor standing performance halls. Many local governments have banned gatherings in karaoke establishments and have imposed a duty to comply with key safety guidelines for movie theatres and entertainment facilities. Such measures are still in effect as of September 2020.

Another important issue of 2020 is the network fee dispute between CPs and telecommunication companies. SK Broadband filed for a ruling to the KCC against Netflix regarding network fees at the end of last year. On 13 April, during the ruling procedure, Netflix filed an action with the court against SK Broadband, claiming that there was no obligation to pay network fees. The conclusion of the case still remains to be seen, as the first hearing for this case is scheduled for the end of October 2020.

Finally, as in 2019, fake news still remains a hot topic in 2020. Fake news recently has become a social problem, as fake news relating to covid-19 continues to be uploaded on social networks. On 22 June 2020, amendments to the Network Act were even proposed requiring information communications service providers to delete fake news without delay if such content is uploaded on the service provider's network. However, it is difficult to predict whether it will pass due to controversies surrounding violations of freedom of expression.

Outlook

i Proposed Amendments to the Copyright Act

The MCST is moving to amend the Copyright Act for the first time in 14 years. The amendment is aimed at reflecting the development of interactive online platforms and the digital creation and use of copyrighted works.

Proposed amendments include:

  1. the introduction of publicity rights;
  2. the introduction of an extended collective licensing system, including the establishment of a copyright management organisation that can quickly grant copyright access for a large amount of content; and
  3. exemption provisions that allow the free use of, inter alia, copyrighted work during the process of data mining.

ii Strengthening protection for personal information

The three major regulations on data have been amended, and some took effect in the second half of 2020. Particularly, provisions relating to the protection of personal information, which were previously divided across the Personal Information Protection Act (PIPA) and the Network Act, were combined and unified into the PIPA. Thus, the protection of personal information by online business operators is to be regulated by the PIPA, not the Network Act, and the regulating authority was also changed from the KCC to the Personal Information Protection Commission. This may result in stricter personal information regulations for companies operating online platforms.

iii Regulation amendment of the game industry

The MCST announced its plan to amend the Game Industry Act (Amendment). The Amendment involves a system for designating a Korean representative for overseas businesses that do not have an address or place of business in Korea; improving the existing content modification reporting system; and improving the game advertisement system and legalising the disclosure of the probability of winning items. Game companies should take note of the developments related to the Amendment.

Footnotes

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