Domestic major webtoon and web novel content providers (CP) were still including illegal clauses in their contracts with authors that would allow for unauthorized production and use of derivative works such as films or dramas. It has been revealed that they attempted to engage in unfair contracts by forcing extensions of the contract period or canceling contracts for unclear reasons.
According to the Fair Trade Commission on the 18th, after reviewing the terms of contracts of 23 webtoon and web novel CPs, a total of 1,112 unfair clauses were found in 141 clauses, and rectifications were mandated. The subjects of the investigation included Golem Factory, DAEWON, D&C MEDIA, DCC Entertainment, Millie's library, RedIce Studio, Ridi, Munpia, Finger Story, Samyang C&C, Seoul Media Comics, Sumi Media, Story Wiz, C&C Revolution, M Story Hub, YLAB, Jaedam Media, Joara, KidariStudio, Two You Dream, Finger, and Haksan Cultural Company.
A key unfair clause limited the authors' rights to create derivative works. Seventeen CPs, including DAEWON and Millie's library, were found to be using clauses that appropriated the rights to create derivative works. Under copyright law, permission from the original author is required to create derivative works. Given that it is difficult to assess the value of derivative works before the original work is made public, the Fair Trade Commission concluded that these constituted unfair clauses.
Twelve CPs, including Ridi, were caught defining all works derived from the original work as subject to transfer in their contracts for the transfer of economic rights. Eleven CPs, such as DCC Entertainment, included clauses allowing them to grant or transfer rights in the contract to third parties without the author’s consent, which they subsequently revised. Eight CPs, including Munpia, made unreasonable demands for rights unrelated to those established in the contract or stipulated that authors must provide derivative uses of contract works to them first.
Twenty-one CPs, including YLAB, forced clauses that shifted all liabilities to the authors in the event of disputes related to works, using expressions such as 'all responsibility for civil and criminal matters' and 'compensation for all damages incurred.' Thirteen CPs, including Sumi Media, had included unfair clauses that prevented authors from asserting their moral rights or allowed modifications without the author's consultation. Eight CPs, including Haksan Cultural Company, used clauses to register their company as co-authors regardless of the contribution to the creation, and to exercise rights in a representative manner.
Clauses designed to arbitrarily manipulate the contract period by the CPs were also uncovered. Seven CPs, including Golem Factory, had unfair clauses stating that if the author did not notify their intention to terminate before the expiration date of the contract, the contract period would be automatically extended. Fourteen CPs, including Seoul Media Comics, had terms allowing them to use the original work or derivative works even after the contract had ended. Thirteen CPs, including Jaedam Media, included vague justifications such as 'if deemed unsuitable' or could terminate the contract immediately without granting the author an opportunity to explain.
The Fair Trade Commission had investigated the terms of contracts from 26 webtoon platform operators in 2018 and corrected unfair clauses such as unauthorized use of derivative works. However, as unfavorable contract cases surfaced thereafter, targets for investigations were selected focusing on CPs and serialization platforms that had not been checked previously, leading to a comprehensive review of contract terms.
An official from the Fair Trade Commission noted, 'We expect this to contribute to ensuring creators' legitimate rights and fostering a fair contract culture,' and added, 'We plan to take strict measures to prevent content providers from using unfair clauses that unjustly limit the rights of creators and copyright holders by exploiting superior positions.'