The Ministry of Culture, Sports and Tourism is expanding the scope of obligations for foreign game companies to designate domestic agents. Following controversy over 'ineffective regulations limited to large companies,' it has unveiled strengthened criteria.
On the 9th, the Ministry of Culture, Sports and Tourism announced a re-proposal of partial amendments to the enforcement decree of the Act on Promotion of the Game Industry.
Previously, the Ministry of Culture, Sports and Tourism specified in the legislative proposal announced in April that game companies providing games with 'total sales of over 1 trillion won in the previous year' or 'an average of over 100,000 domestic users in the previous three months as of the end of the previous year' must designate a domestic agent.
Even if such conditions are not met, if the Minister recognizes that incidents or accidents causing significant harm to game users have occurred or are likely to occur, the company will still be included in the obligation to designate a domestic agent.
The intent was to impose obligations on foreign game companies without a separate branch or office in Korea to comply with legal obligations, including the mandatory disclosure of information regarding probability-based items, which became mandatory in March of last year.
However, the gaming industry pointed out that the standard of 'annual sales of 1 trillion won and an average of over 100,000 domestic users' fails to regulate small and medium-sized foreign game companies that could harm domestic users.
In response, the Ministry of Culture, Sports and Tourism gathered opinions from various sectors and revised the requirement related to 'average monthly users of over 100,000' to include 'those distributing or providing games with an average of more than 1,000 new installations on domestic mobile devices based on the previous year.'
Even small foreign game companies must have a domestic agent if they provide games with approximately 370,000 downloads annually. The revised law mandates that foreign game companies without a physical presence in Korea must designate a domestic agent to protect domestic users and maintain distribution order. Those who violate this will face fines of up to 20 million won.