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Newsletter | February 2016, Issue 1
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TECHNOLOGY, MEDIA & TELECOMMUNICATIONS
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KCC Amends Enforcement Decree of the Broadcasting Act to Specify Specific Categories of Prohibited Conduct
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On December 31, 2015, the Enforcement Decree of the Broadcasting Act (the “Enforcement Decree”) was amended to enumerate specific categories of conduct that constitute prohibited acts under the amended Broadcasting Act.
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Amendment to the Broadcasting Act
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On March 13, 2015, the Broadcasting Act was amended (the “Amendment”). The Amendment introduced a provision prohibiting broadcasting channel service providers specializing in product promotion and sales broadcasting (“Home Shopping Service Providers”) from unfairly determining, cancelling, and changing the vendors’ broadcast dates, times, durations, and any related production expenses.
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Specifics of the Amended Enforcement Decree
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The Enforcement Decree further prohibits the following conduct:
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| 1. |
Unfairly cancelling or changing the fixed date, time, and/or duration of a vendor’s broadcast without prior agreement;
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| 2. |
Any of the following conduct, if undertaken in response to a vendor’s refusal to accept a proposed profit sharing plan not related to the profits from sales of the vendor’s products32; and
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Allocating a grossly disadvantageous broadcast date, time, and/or duration; |
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Cancelling a fixed broadcast date, time, and/or duration of a vendor’s broadcast; and |
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Changing a fixed broadcast date, time, and/or duration of a vendor’s broadcast to a grossly disadvantageous date, time, and/or duration. |
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Unfairly shifting all or portions of the Home Shopping Service Provider’s production expenses33 to vendors by conditioning the allocation of the vendors’ broadcast schedules on the acceptance.
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What This Means
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Engaging in any of the above conduct may result in administrative sanctions issued by the Korea Communications Commission (the “KCC”), including corrective orders and administrative fines of up to 2% of sales revenue.
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In addition, the KCC must notify the Ministry of Science, ICT and Future Planning (the “MSIP”), if it orders Home Shopping Service Providers to implement corrective measures.
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The MSIP may then do any one of the following:
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Revoke the Home Shopping Service Provider’s business approval; |
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Reduce the effective period of such approval; or |
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Suspend all or a part of the Home Shopping Service Provider’s business for up to 6 months. |
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| 32 |
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Excludes profits derived from sales of products which do not generate sales during the broadcast, such as insurance products, tour package products, etc.
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| 33 |
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Including pre-production expenses and appearance fees,
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Back to Main Page
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If you have any questions regarding this article, please contact below:
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