YOON&YANG

The National Assembly plenary session passed the Committee Alternative Bill on September 29, 2026, which consolidated two partial amendment bills to the Game Industry Promotion Act (sponsored by Rep. Cho Seung-rae and Rep. Kim Jae-won, respectively) during the 439th regular session of the Culture, Sports and Tourism Committee. The core of this amendment lies in codifying the statutory obligation of overseas game business operators to protect domestic users from harm, while substantially reinforcing the effectiveness of the "domestic representative" designation system, which had been criticized as largely nominal. Notably, the amendment also introduces powerful enforcement measures, allowing authorities to restrict access to information and communications networks if a company fails to designate a domestic representative or fails to comply with corrective orders regarding probability-type item disclosure obligations.

1. Background of the Amendment

2. Key Contents of the Amendment

3. Strengthening of Sanctions and Enforcement Measures

4. Effective Date and Transitional Measures

5. Implications 

1. Background of the Amendment

In recent years, issues have consistently been raised regarding overseas game publishers and distributors operating servers and corporate entities abroad while offering services to domestic users in Korea. These entities have frequently lacked an effective domestic channel to address various user harms, such as the non-disclosure of probability-type item information, refusal of refunds, and arbitrary account suspensions. Under current law, overseas business entities meeting certain criteria are required to designate a domestic representative. However, the qualification standards for designated entities have been unclear, and post-designation management and supervisory mechanisms have been inadequate, resulting in many cases of merely formal designations. 
 

In response, the Culture, Sports and Tourism Committee of the National Assembly consolidated and adjusted the bill sponsored by Rep. Cho Seung-rae (Bill No. 2211759, introduced on July 25, 2025) and the bill sponsored by Rep. Kim Jae-won (Bill No. 2220858, introduced on August 27, 2026) into a Committee Alternative Bill, following review by the Culture and Art Legislation Subcommittee on September 2, 2026. The core objective of this alternative bill is to "establish statutory obligations for overseas game business operators to protect domestic users from harm and handle complaints, and to clearly specify the entities subject to domestic representative designation for effective fulfillment of such obligations, in order to ensure effective regulatory enforcement." This alternative bill passed the plenary session of the National Assembly on September 29, 2026. 
 

2. Key Contents of the Amendment

A. New Obligations to Protect Domestic Users and Handle Complaints (Proposed Article 28(1)7-2) 
 

A new provision is added to the obligations of game business operators requiring them to "take measures to protect domestic users from harm and resolve user complaints," thereby codifying domestic user protection a statutory obligation of business operators. 

B. Clarification of the Priority Order for Entities Subject to Domestic Representative Designation (Proposed Article 31-2(2)) 
 

While the current qualification requirement for a domestic representative is merely defined as "a person having a domicile or place of business in Korea," the amendment explicitly establishes the following order of priority: 
 

① A domestic corporation established by the relevant game business operator; 
 

② A domestic corporation over which the relevant game business operator exercises a dominant influence in terms of executive composition, business operations, etc. (a corporation as prescribed by Presidential Decree) 
 

③ A corporation capable of faithfully performing the duties of a domestic representative (limited to cases where no corporations falling under items 1 or 2 above exists). 
 

This is interpreted as an effort to prevent the practice of designating formal third-party agents despite the existence of domestic affiliates or subsidiaries, thereby ensuring that the corporations with substantive control bears primary responsibility. 
 

C. Expanded Scope of Duties of Domestic Representatives and New Ancillary Obligations for Designating Operator (Proposed Article 31-2(1-2), (3) to (5))
 

The scope of duties that may be delegated to a domestic representative is expanded to include "matters related to the protection of domestic users from harm and the handling of user complaints." In addition, the following ancillary obligations are  newly introduced:
 

① Compliance obligation of the domestic representatives: A designated domestic representative must comply with all statutory requirements (Article 31-2(3))

② Obligation to educate and supervise by the designating business operator: Game business operators must educate their domestic representatives and inspect their work status in accordance with Presidential Decrees, to ensure faithful performance of their duties (Article 31-2(4))
 

③ Obligation to maintain designation: The designation of the domestic representative must be maintained without interruption for as long as the game is distributed or provided in Korea, and the status of the designation may not be arbitrarily changed (Article 31-2(5))
 

3. Strengthening of Sanctions and Enforcement Measures

A. Order to Restrict the Use of Information and Communications Networks (Proposed Article 38(7), (9), etc.)
 

If a business operator fails to designate a domestic representative or fails to comply with a corrective order regarding violation of probability-type item disclosure obligations, the Minister of Culture, Sports and Tourism or the Chairperson of the Game Rating and Administration Committee (GRAC) may issue an order to refuse, suspend, or restrict the use of information and communications networks. This constitutes a powerful enforcement measure that could effectively lead to blocking access to domestic services, thereby significantly enhancing regulatory leverage over overseas business operators.

B. Establishing the Authority to Request Submission of Materials (Proposed Article 39-3)
 

The Minister of Culture, Sports and Tourism or the Chairperson of the GRAC may request game business operators to submit relevant materials in cases where: ① a violation of the law is discovered or suspected; ② a report or complaint regarding a violation is received; ③ verification of whether the criteria for domestic representative designation are met is required; or ④ other circumstances prescribed by Presidential Decree arise. Business operators may not refuse such requests or submit false materials without justifiable grounds.
 

C. Overhauling the Provisions on Administrative Fines (Proposed Article 48)
 

Statutory grounds for imposing administrative fines have been overhauled and newly established to cover failure to designate a domestic representative or designation of an improper entity, and violation of obligations to educate and supervise, and violation of material submission requirements (failure to submit requested materials without justifiable grounds or submission of false materials.
 

4. Effective Date and Transitional Measures

The amended Act will take effect six months after the date of promulgation (Addendum Article 1). The provision on the priority order of entities for designating domestic representative (Article 31-2(2)) will apply to new designations made after the enforcement date (Addendum Article 2). For business operators that have already designated a domestic representative prior to enforcement, if there exists an entity that would take priority under the amended provisions (such as a domestic subsidiary or an entity under dominant influence), the operator must re-designate its domestic representative from among such priority entities within six months from the enforcement date (Addendum Article 3).
 

5. Implications  
 

This amendment shifts the focus of the domestic representative system from "formal designation" to "designation of a substantively responsible entity," Addressing longstanding criticism of its lack of practical effect. In particular, it is likely that the practice of appointing an external, formal   representative despite the existence of a domestic subsidiary or an entity subject to dominant influence will no longer be permitted. Therefore, overseas game companies with affiliates or branch offices in Korea should proactively review whether re-designation of their domestic representatives will be required. 
 

From a corporate compliance perspective, the following measures are recommended:
 

Review Corporate Structure for Re-designation: Overseas game business operators (especially those meeting the thresholds for number of domestic users or sales revenue) should check whether a domestic corporation of their own or a domestic affiliate over which they exercise dominant influence exists, and prepare in advance for the re-designation procedures in anticipation of the amendment taking effect.
 

Establish Operational and Record-Keeping Frameworks: Corporations designated as domestic representatives will become subject to statutory education and supervisory oversight, and should therefore establish operating procedures and record-keeping systems for handling complaints and providing remediation for damages.
 

Enhance Internal Compliance against Network Blocking Risks: Because non-compliance with corrective orders regarding probability-type item disclosure obligations, etc. now carries the new risk of network access/usage restrictions (blocking), it is urged to establish or improve the internal compliance systems to promptly verify and implement corrective orders.
 

Systematic Document Management: In preparation for document submission requests by the Ministry of Culture, Sports and Tourism or the GRAC, business operators should systematically mange and retain materials related to domestic representative designation and any violations of law. 
 

Although a six-month grace period is provided following promulgation, the transitional re-designation requirements (within six months) as well as the material submission and supervisory obligations may impose operational burdens immediately upon enforcement. Accordingly, overseas game companies and relevant personnel at their domestic affiliates are strongly advised to undertake legal review and establish internal compliance frameworks promptly.
 

Yoon & Yang Game Center consists of professionals and experts with rich practical experience in relevant bodies, specializing in the game industry. We proactively monitor issues and are ready to respond quickly to all legal matters regarding the game sector. For inquiries, please contact us at any time.

[Korean Version]