On October 1, 2026, the National Assembly voted to pass a bill (“Amendment”) amending the Game Industry Promotion Act (“GIPA”).
The Amendment will significantly strengthen the user protection obligations of both domestic and foreign game companies in the following way:
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1.
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The Amendment will impose new obligations on game companies to protect domestic users from harm and handle user complaints.
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2.
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The Amendment will grant the Ministry of Culture, Sports and Tourism (“MCST”) and the Game Rating and Administration Committee (“GRAC”) general authority to request information from game companies.
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3.
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The Amendment will enhance the effectiveness of the Domestic Agent System for overseas companies by:
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A.
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Adding user protection and complaint handling duties under item (1) above to the scope of domestic agents’ duties, mandating the designation of domestic subsidiaries as domestic agents, and introducing obligations for foreign game companies to educate, manage, and supervise domestic agents.
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B.
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Enabling the MCST to issue corrective orders if a foreign game company violates domestic agent-related provisions, with non-compliance subject not only to fines, but also to more serious sanctions, such as taking down the game itself.
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4.
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The Amendment will establish legal grounds to take down games, advertisements, and promotional materials for non-compliance with the corrective orders issued for loot box drop rate disclosure violations.
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With the passage of the Amendment, both the Korean and foreign game companies will need to strengthen and supplement their internal procedures for protecting domestic users and handling their complaints, with a particular focus on continuous compliance checks of loot box drop rate disclosures. Foreign game companies will also need to establish systems to effectively operate, manage, and supervise domestic agents (pending further amendments to the Enforcement Decree of the GIPA (“Enforcement Decree”)), and those with subsidiaries or affiliates in Korea will need to re-designate domestic agents.
The Amendment will take effect six months after its promulgation by the President. Provisions regarding eligible domestic agents will apply from the enforcement date, but foreign game companies that have already designated domestic agents and have subsidiaries or affiliates in Korea must re-designate their Korean subsidiaries or affiliates as domestic agents within six months from the enforcement date.
The key details of the Amendment are set out below.
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1.
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New Obligations of Game Companies to Protect Domestic Users and Handle Grievances
The Amendment will add to the duties of game companies an obligation to “take measures to protect domestic users from harm and address user complaints” (Article 28, Paragraph (1), Item 7-2 of the Amendment). Although the Amendment does not directly establish separate criminal penalties or administrative fines for violating this duty, a violation of Article 28 of the GIPA could, in principle, serve as a ground for administrative sanctions, such as business suspension (or an administrative fine in lieu of the business suspension), registration cancellation, or business closure pursuant to Articles 35 and 36 of the GIPA. Companies should monitor the forthcoming amendments to Article 26, Paragraph (1), Table 5 of the Enforcement Rule of the GIPA (“Enforcement Rule”), which will set forth the criteria for administrative sanctions.
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2.
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General Authority to Request Information
Under the Amendment, the MCST or GRAC may request game companies to submit information and documents in the following circumstances:
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If a violation of the GIPA is discovered or suspected;
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If reports or civil complaints regarding violations of the GIPA are received;
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If verification is needed to determine whether domestic agent designation criteria are met; or
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In other instances to be prescribed in the Enforcement Decree where verification of GIPA violations is necessary.
Companies receiving such requests must comply, unless there is a justifiable reason (Article 39-3, Paragraph (1) of the Amendment), and failure to submit information without a justifiable reason or submitting false information will result in an administrative fine of up to KRW 10 million (Article 48, Paragraph (2), Item 7-2 of the Amendment).
For foreign companies, authorities are empowered to request information, such as revenue or download counts, to verify whether they meet the criteria for mandatory designation of domestic agents.
Because the specific scope, methods, and procedures for requests for information are delegated to the Enforcement Decree (Article 39-3, Paragraph (1), Item 4 and Paragraph (2) of the Amendment), companies should monitor subsequent amendments to the Enforcement Decree.
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3.
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Enhancing the Effectiveness of the Domestic Agent System
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(1)
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Expanding the Scope of Domestic Agents’ Duties
The Amendment will explicitly add “duties regarding the protection of domestic users and handling of user complaints pursuant to Article 28, Paragraph (1), Item 7-2” to the scope of duties that domestic agents perform on behalf of foreign game companies (Article 31-2, Paragraph (1), Item 1-2 of the Amendment). Previously, domestic agents were not deemed to be violating the GIPA even if they did not handle user protection matters or user complaints, as long as such matters or complaints are not related to the labeling obligations under Article 33 of the GIPA. Under the Amendment, however, such failure can constitute a violation of the GIPA.
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(2)
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Obligation to Designate Domestic Agents with Substantive Presence
If a foreign game company has (i) a Korean subsidiary or (ii) a Korean corporation over which the foreign game company exercises controlling influence regarding executive composition or business operation (to be further described in the Enforcement Decree), the Amendment will require the foreign game company to designate such Korean entity as the domestic agent (Article 31-2, Paragraph (2) of the Amendment). As noted above, foreign game companies that have already designated domestic agents, but have such eligible Korean entities must re-designate them as domestic agents within six months from the enforcement date.
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(3)
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New Obligations for Education, Management, and Supervision by Companies
The Amendment will establish several new obligations to enhance the effectiveness of the domestic agent system.
First, the Amendment will impose on designated domestic agents a legal duty to comply with the scope of their designated duties (Article 31-2, Paragraph (3) of the Amendment). However, separate penalty provisions, such as fines directly targeting the domestic agents themselves, have not been introduced.
Foreign game companies are newly required to educate, manage, and supervise their domestic agents (Article 31-2, Paragraph (4) of the Amendment). Because the specific methods for education, management, and supervision will be specified in the Enforcement Decree, foreign game companies should monitor the progress on the upcoming amendments to the Enforcement Decree.
The Amendment will also introduce an obligation to maintain domestic agent designations without interruption and will prohibit arbitrary changes to the designation status during the period in which games are distributed or made available in Korea (Article 31-2, Paragraph (5) of the Amendment). This provision is unique to the GIPA and does not yet exist in domestic agent systems under other Korean laws. Detailed standards and procedures for designation maintenance and modification will be set in the Enforcement Decree, and foreign game companies should also monitor these forthcoming amendments.
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(4)
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Strengthening Sanctions for Non-Compliance
First, new grounds for administrative fines have been established. A fine of up to KRW 20 million can be imposed for violating the designation rules for domestic agents (e.g., domestic subsidiaries) under Article 31-2, Paragraph (2), and a fine of up to KRW 20 million can also be imposed for failing to educate, manage, or supervise domestic agents under Article 31-2, Paragraph (4).
Next, the MCST will be able to issue corrective orders on “persons who violate Article 31-2”, which governs the domestic agent system (Article 38, Paragraph (9) of the Amendment). If a company does not comply with such a corrective order, the MCST will be able to issue an order to refuse, suspend, or restrict the use of the online networks, namely, a take-down order, against the relevant game (Article 38, Paragraph (7), Item 2 of the Amendment).
As discussed in Section (3) above, while Article 31-2, Paragraph (3) of the Amendment imposes a duty on the domestic agents to comply with their designated duties, it remains ambiguous whether a domestic agent’s failure to comply with its duties could also trigger an MCST corrective order or, further, a take-down of the relevant game. Foreign game companies should monitor whether further guidance clarifies this issue.
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4.
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Legal Grounds for Take-Down Orders Regarding Loot Box Drop Rate Disclosures
Previously, the MCST could issue corrective orders to those who fail to comply with the loot box drop rate disclosure obligations under Article 33-2. The Amendment will establish a new legal basis allowing the MCST to issue orders to refuse, suspend, or restrict the online network usage, namely, take-down orders, for relevant games, advertisements, and promotional materials, if a company does not comply with such corrective orders (Article 38, Paragraph (7), Item 3 of the Amendment).
This provision appears to have been introduced to penalize and deter companies (particularly, foreign game companies) that received corrective orders for loot box drop rate disclosure violations, but continue servicing games to Korean users without compliance.
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[Korean Version]
