Subcontract Law Violations in Gaming Industry Under Investigation by FTC

The Fair Trade Commission is reportedly conducting a survey on subcontract transactions targeting major game companies in Korea.

According to the IT industry on June 28, the Fair Trade Commission recently started on-site investigations into major domestic game companies. In January, the Fair Trade Commission announced that it would intensively monitor verbal contracts, unfair special contracts, and payment delays during the outsourcing process related to the software (cloud, games, etc.) and content industries. It has previously announced plans to improve unfair practices in the subcontracting field through field inspections.

Additionally, the Fair Trade Commission has recently conducted field investigations into Nexon, Netmarble, NCSOFT, Kakao Games, and Krafton, which represent the Korean gaming industry.

Notably, Nexon Korea previously received a corrective order from the Fair Trade Commission for violating the Subcontract Law by not writing contracts when outsourcing the manufacture of character merchandise for the game Mabinogi or design outsourcing for MapleStory2 to 20 small and medium subcontractors between 2015 and 2017.

NCSOFT also received a corrective order and a fine for not issuing or delaying the issuance of contracts when outsourcing the production of game graphics to 30 subcontractors in 116 cases in 2017.