– 21 Types of Unfair Terms, Including Unauthorized Assignment of Derivative Work Rights and Infringement of Moral Rights –
– Comprehensive review of all terms of use from 23 companies to promote fair contract practices –
The Korea Fair Trade Commission (KFTC), chaired by Han Ki-jeong, reviewed the full terms of use from 23 companies engaged in the production, distribution, and platform serialization of webtoons and web novels. As a result, the KFTC rectified a total of 1,112 unfair terms across 141 contracts, categorized into 21 types.
The 23 companies subject to this review include Golem Factory, Daon Creative, Daewon C.I., DCC ENT, D&C Media, Redice Studio, RIDI, Munpia, Millie's Library, Samyang C&C, Seoul Media Comics, SomyMedia, Storywiz, C&C Revolution, MStoryHub, YLAB, Jaedam Media, Joara, KW Books, Kidari Studio, ToYouDream, Finger Story, and Haksan Publishing.
The types of unfair terms identified are as follows:
- Clauses that unilaterally assign derivative work rights to the business operator (17 companies)
- Clauses that excessively broaden the business operator’s contractual rights (12 companies)
- Clauses that restrict the exercise of copyright or property rights (8 companies)
- Clauses that impose excessive damage liability or shift liability to the author (21 companies)
- Clauses that impose excessive penalties for breach of contract (6 companies)
- Clauses that infringe upon authors' moral rights (e.g., right of attribution, right to integrity) (13 companies)
- Clauses that assign copyrights to non-authors or designate the business as representative copyright holder (8 companies)
- Clauses that allow the business to unilaterally determine or change key contract terms (18 companies)
- Unfair dispute resolution or jurisdiction clauses (19 companies)
- Unfair contract extension clauses (7 companies)
- Clauses requiring consent from publishers or exclusive licensees when transferring copyright (9 companies)
- Clauses allowing use of works or extension of contract effect after termination (14 companies)
- Clauses that unfairly prohibit objections (4 companies)
- Clauses allowing rights to be sublicensed or transferred without author consent (11 companies)
- Unfair payment terms (2 companies)
- Unfair termination clauses (13 companies)
- Clauses that presume intent without explicit expression (2 companies)
- Clauses likely to provide insufficient accounting or financial information (2 companies)
- Clauses that may result in unreasonably long review periods for works (1 company)
- Clauses imposing excessive confidentiality obligations (4 companies)
- Clauses that prevent invalidity of one term from affecting the rest of the contract (1 company)
Background of the Investigation
In 2018, the KFTC conducted a similar review of serialization contracts between 26 webtoon platforms and creators, rectifying unfair terms. However, since then, creators have continued to report unfair contracts, particularly concerning derivative work rights, overseas distribution rights, and provision of accounting statements.
In the webtoon and web novel sectors, contracts are increasingly being made through content suppliers in addition to direct agreements with platforms. Since unfair terms in these intermediary contracts can also infringe on creators' rights, the KFTC focused its inspection on content suppliers as well.
To establish a fairer ecosystem and reinforce creators’ rights, the KFTC examined not only direct contracts between creators and platforms but also agreements between content suppliers and platforms, without limiting the scope to specific types of terms.
In parallel, the KFTC also contributed to institutional efforts by participating in the development and revision of the Ministry of Culture, Sports and Tourism’s Standard Contracts for Comics and Web Novels, ensuring their principles were reflected in this review.
This comprehensive action is expected to contribute significantly to protecting the legitimate rights of creators and promoting a fair contract culture in the webtoon and web novel industries.