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S. Korea FTC Finds Over 1,000 Unfair Terms in Webtoon, Web Novel Contracts
posted on by Wonhee Cho
South Korea's Fair Trade Commission (KFTC) has identified a sweeping number of unfair contract terms used by major webtoon and web novel content providers, including clauses allowing for the unauthorized production and use of derivative works such as films and dramas without proper consent from creators.
According to a statement released on May 18, the KFTC reviewed the standard contract terms of 23 content providers and found 1,112 unfair provisions across 141 contract templates, and ordered the companies to revise them.
The list includes leading names such as RIDI, Munpia, D&C MEDIA, YLAB, Kidari Studio, Storywiz, ToYou Dream, Redice Studio, Joara, and Lezhin Comics.
- Unauthorized Derivative Works: 17 companies, including Daewon C.I. and Millie's Library, were found to have contract clauses claiming full rights to create derivative works without explicit consent from the original creators—an act that violates Korean copyright law, which requires permission from the original author.
- Broad Copyright Transfers: 12 companies, including RIDI, were found including clauses that transferred all derivative rights to the content provider, even when those works had not yet been conceived.
- Third-Party Usage Without Consent: 11 companies, including DCC ENT, allowed third-party usage or transfer of rights without the author's permission.
- Unrelated Rights and Priority Use: 8 companies, including Munpia, inserted clauses demanding unrelated rights or priority rights for secondary usage—even when the rights had nothing to do with the initial contract.
- Author Liability for All Disputes: 21 companies, including YLAB, used language holding authors fully liable for any and all legal or financial disputes, regardless of fault.
- Restrictions on Author Name and Content Alterations: 13 companies, including SomyMedia, included terms preventing authors from asserting name attribution or allowed the company to modify the work without the author's consent.
- Forced Co-Copyright Registration: 8 companies, including Haksan Publishing, claimed co-copyright status even if they had not contributed to the creative process.
- Automatic Contract Extensions: 7 companies, including Golem Factory, included automatic renewal clauses unless the author gave prior notice of termination — shifting the burden unfairly to the author.
- Use of Works After Contract Expiry: 14 companies, including Seoul Media Comics, were found to retain rights to use the work or its derivatives even after contract termination.
- One-Sided Termination Clauses: 13 companies, including Jaedam Media, included vague terms like “if deemed inappropriate” to justify unilateral contract termination without providing a chance for authors to defend themselves.
The KFTC previously investigated webtoon platforms in 2018 and required revisions to clauses regarding derivative work rights. However, as exploitative contracts continued to surface, the commission expanded its investigation this time to include both content providers and serialization platforms.
