As the amount of content being distributed through online platforms increases rapidly, the Government has adopted a self-rating system for online video products and is considering implementing further regulatory measures.  At the same time, the Government is actively reviewing measures for the self-regulation of online platforms in order to foster the growth of the mega-platform market while imposing an appropriate level of regulations.  However, after a recent fire at a data center caused a major server outage in South Korea, there have been growing concerns regarding the proposed deregulation.

Recently, a new amendment to the Promotion of the Motion Pictures and Video Act (the “MPVPA”) was enacted to introduce a self-rating framework for online video products and will take effect from March 28, 2023.  On November 25, 2022, the Ministry of Culture, Sports and Tourism (the “MCST”) announced a proposed amendment to the Enforcement Decree of the MPVPA, which includes specific details regarding the implementation of the self-rating framework.

In relation to the self-regulation of online platforms, the four divisions of the Private Self-Regulation Organization for the Online Platform Market (the “Self-Regulation Organization”) held kick-off meetings in September and have been engaging in detailed discussions through follow-up meetings.  However, due to the existence of differences in opinions (among platform companies or between platform companies and consumer groups) and to the recent fire at a Korean data center, there has been growing criticism toward introducing a self-regulation framework for online platforms.  This has triggered an ongoing an debate on whether said framework should be implemented.

1.   Self-Rating Framework for Online Video Products
 

Under the amended MPVPA, businesses designated by the MCST as self-rating business operators can rate their own online video products (excluding products that have a Restricted Viewing rating) without going through the rating process conducted by the Korea Media Rating Board (the “KMRB”).  In order to be designated as a self-rating business operator, the business operator in question must have been reported as either a value-added telecommunications service provider or a business entity that provides cable television (“CATV”) broadcasting, satellite broadcasting, or Internet multimedia broadcasting services.  In addition, the business operator must obtain approval on its (i) self-rating framework masterplan and (ii) plan for juvenile and consumer protection.  The designation will be valid for five years.  Once it expires, the business operator must be re-designated.

Self-rating business operators are required to rate in accordance with the KMRB’s Video Rating Criteria (rather than applying their own standards).  They must also comply with the obligations under the MPVPA by indicating certain types of information, including the rating.  The KMRB may override the self-rated ratings for online video products that should have been designated as “Restricted Viewing” products by re-rating them or removing the rating.  The KMRB may also demand business operators to adjust the rating if the rating substantially violates the Video Rating Criteria or differs among business operators.  The KMRB may also issue various administrative dispositions, evaluations and recommendations for improvement.  Such dispositions will be one of the factors considered during the re-designation process.

Furthermore, the proposed amendment to the MPVPA Enforcement Decree specifies, among others, the following: (i) application procedures for self-rating business operators, (ii) standards and procedures for retraction and suspension of designations, and (iii) electronic means of verifying whether the video products are covered by legitimate rights.
 

2.   Online Platform Self-Regulation 
 

Below is a summary of the key issues on self-regulation discussed within the four divisions of the Self-Regulation Organization.
 

In light of the recent fire at a data center, the Government is actively discussing whether there are more appropriate measures to regulate platform operators.  In particular, the Korea Fair Trade Commission (the “KFTC”) announced its plan to enact the “Guidelines on Assessing Abuse of Dominant Market Position and Unfair Trade Practices by Online Platform Operators” by the end of this year.  In addition, the MSIT is in the process of reviewing regulatory measures regarding service stability and outage prevention.

Taking the aforementioned into account, we advise relevant companies to closely monitor the ongoing discussions.  As the deadline for commenting on the proposed amendment to the MPVPA Enforcement Decree is on January 5, 2023, interested companies should make sure to submit their comments and opinions beforehand.  The amendments to the MCST ordinances, which will determine the specifics of the templates used to file self-rating business operator designation applications, should be closely monitored as well.

[Korean Version]