- Correction of 5 types of unfair terms and conditions for webtoon artists by 7 webtoon platform operators
- Part of the establishment of an ecosystem of fairness and co-prosperity by strengthening the rights of creators in the content sector such as comics, webtoons, and web novels
The Korea Fair Trade Commission (Chairman Han Ki-jung, hereinafter referred to as the "Fair Trade Commission") reviewed webtoon serial contracts used by 26 webtoon service providers*, including Naver Webtoon and NCsoft, and corrected five types of unfair terms and conditions (seven operators**) that are unfairly disadvantageous to webtoon writers.
* Naver Webtoon, NextSure Korea, NexCube, D2 Company, Resin Entertainment, Muddleworks, Mr. Blue, BaroComics, Battle Entertainment, SpringComics, BookCube Networks, Seoul MediaComics, NCsoft, NHN Entertainment, NP, MXA Entertainment, Wisdom House, KComics, KT, Comica Entertainment, KidariENT, Topco, TwoMix, Foxtoon, Friday, and Podotree [currently Kakao Entertainment]
** Naver Webtoon, Nexture Korea, Resin Entertainment, Muddleworks, Seoul Media Comics, NCsoft, 2Mix
In order to establish a fair contract culture in the cultural content market and strengthen the rights of creators, the Korea Fair Trade Commission has been conducting a fact-finding inspection on the terms and conditions of the content sector, such as comics, webtoons, and web novels, and at the same time, re-examined the webtoons serialization contracts of 26 webtoon platform operators (hereinafter referred to as "business operators") corrected in 2018. The correction is about the correction of five types of unfair terms and conditions newly added by 26 webtoon operators since the correction in 2018.
* Top 20 content production companies, comics, webtoons, web novels publishers, and e-book platform companies in the webtoon field (see Statistics on the Publishing Market of the Korea Publishing Culture Association in 2021)
Looking at the major unfair terms and conditions, first, there was a provision set by the business operator to include the right to create secondary works* in the contract content when contracting webtoon content serialization.
* Secondary right to create works: The right to translate, adapt, and transform the original work and produce and use secondary contents such as webtoons, dramas, and movies (Articles 5 and 22 of the Copyright Act)
[Example of Unfair Terms and Conditions]
※ Resin Entertainment Contract: This contract allows the artist to grant the right to provide services related to works and translated works to Resin Entertainment,
Since secondary works are created on the premise of the original work, the author is the subject of the right to create secondary works (Article 22 of the Copyright Act). Therefore, even a business operator who has the right to use the original work, such as serializing webtoon content, needs a separate agreement to acquire the right to create a secondary work. The terms and conditions set by the business operator, including the right to create a secondary work, limit the webtoon artist's right to choose when to produce a type of secondary work with whom, and under the Terms and Conditions Act, it is a provision that unreasonably restricts customers from signing a contract with a third party (Article 11, No. 3 of the Terms and Conditions Act).
Businesses voluntarily corrected the provisions by deleting the contents or establishing a separate explicit contract for business related to secondary works.
Next, in a contract that established the right (priority negotiation right) for a business operator to negotiate the creation of a secondary work of the webtoon, there was a clause that restricted the webtoon artist from providing a third party with unfavorable conditions to the third party when negotiating with a third party due to the breakdown of an agreement with him.
[Example of Unfair Terms and Conditions]
※ Naver Webtoon Contract: If a provider enters into a contract with a third party for a global secondary business, it shall not set the contract terms with a third party on a condition that is more unfavorable to the provider than the contract terms notified to Naver Webtoon.
These restrictions substantially limit the webtoon artist's right to produce secondary works and use them for other businesses, and they are provisions that unreasonably limit customers from entering into contracts with third parties (Article 11, No. 3 of the Terms and Conditions Act).
Businesses voluntarily deleted the contents of the provision to resolve the unfairness.
Unfair terms and conditions such as provisions imposing excessive liability for damages, unfair contract termination provisions, and unfair jurisdiction provisions have been corrected, which is expected to significantly reduce the risk of webtoon artists being damaged by unfair contract terms.
Following the correction of unfair terms and conditions by seven webtoon platform operators, the Korea Fair Trade Commission plans to actively correct any unfair content in terms and conditions used by more than 20 content producers, publishers and platforms, including comics, web novels, and others, which are currently under inspection.
In addition, the Korea Fair Trade Commission participated in the Ministry of Culture, Sports and Tourism's enactment and revision of the "Standard Contract in the Cartoon Sector" to support the improvement of unfair practices and sound growth in the content sector.