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Updates on Self-Rating Framework for Online Video Products and Trends in Online Platform Self-Regulation

2023.01.06

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.
 

Division Summary

Unequal Relationship Division
(Supervised by the KFTC)

[Anticipated Key Issues]

  • Unequal relationships (characterized by an imbalance of power between contracting parties denoted as “Gap” and “Eul”) in the online platform market, unfair trade practices, and voluntary dispute resolution.

[Ongoing Discussions]

  • Adopting a custom-tailored approach for each industry.

  • Drafting model agreement templates to be used in transactions between platform service providers and vendors.

  • Plans to promote mutually beneficial platform fees (to ease the burden on small business owners and enhance transparency.)

Consumers & Users Division
(Supervised by the KFTC and the KCC)

[Anticipated Key Issues]

  • Protecting consumers on the platform, improving the user environment by moderating harmful content and Autonomous Dispute Mediation.

[Ongoing Discussions]

  • Expanding the scope of information disclosed to consumers and devising measures to promptly tackle issues that may harm consumers.

  • Expanding the scope of safety and hygiene-related information disclosed on products traded on online platforms, and preparing measures to promptly tackle large scale consumer harm.

Data & AI Division (Supervised by the Ministry of Science and ICT (the “MSIT”)

[Anticipated Key Issues]

  • Data mobility and compatibility; AI transparency and reliability; and safe use of data.

[Ongoing Discussions]

  • Measures to ensure transparency in algorithm and data provision.

  • Measures to enhance transparency in search and referral services, considering the unique traits of each platform operator and sector.

  • Measures to provide relevant data related to vendors on online platforms (excluding trade secrets, preventing user abuse and taking into consideration the amount of data currently provided.)

ESG Division
(Supervised by MSIT)

[Anticipated Key Issues]

  • Solving social issues using online platforms, ensuring equal access to digital technology, and improving corporate governance in platform companies.

[Ongoing Discussions]

  • Laying down a fundamental framework to create social value based on traits unique to the platform industry.

  • Establishing best practices to promote an environment that supports vulnerable social groups, small business owners and platform employees, and establishing a fundamental framework based on such best practices to generate social values through the traits unique to the platform industry (i.e., data, AI and network).


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]

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