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Korea Fair Trade Commission Launches Probe into Webtoon, Web Novel Industry Practices
posted on by Wonhee Cho
The Korea Fair Trade Commission (KFTC) has launched a full-scale investigation into the revenue structures and business practices of the webtoon and web novel industry, aiming to address long-standing concerns over unfair contracts and profit distribution.
According to reporting from Korean online media outlet edaily on May 4, the regulator recently began a fact-finding study examining transactions across the ecosystem, including platforms, content providers (CPs), and creators. The probe will assess whether certain practices violate relevant laws, including the Monopoly Regulation and Fair Trade Act and the Act on the Regulation of Terms and Conditions.
Key areas under review include revenue-sharing (RS) models, minimum guarantee (MG) payment structures, and rights to secondary works.
Revenue-sharing arrangements — in which platforms, CPs, and creators split earnings — have faced criticism for lack of transparency. Industry insiders have raised concerns that as revenue passes through multiple intermediaries, the portion ultimately reaching creators can be significantly reduced.
Minimum guarantees, or upfront payments made regardless of a work's performance, are also a major point of contention. In many cases, these payments are later recouped from future earnings, meaning creators of underperforming titles may see little to no additional income for extended periods.
The commission will also examine how rights to secondary adaptations — such as films, dramas, and games — are structured. Critics argue that broad or long-term rights claims by platforms or CPs may excessively limit creators' control over their intellectual property and downstream revenue opportunities.
To conduct the study, the commission plans to survey more than 100 companies, including major domestic platforms and content providers. The investigation will also include in-depth interviews and expert consultations, covering topics such as revenue models, market share dynamics, competition for hit content, and broader industry structure.
Observers say the move reflects the commission's broader effort to expand oversight of power imbalances in platform-based industries into the content sector. Given the scope of the investigation — which includes both contractual practices and market structure — the findings could lead to regulatory reforms or formal enforcement actions.
Last year, 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.
Japan's Fair Trade Commission also surveyed the anime industry last year, and released a report in December highlighting the transactional and contractual issues facing the industry.
Source: edaily (Shin-woo Kang)
