By Sagar V. Mankar 
The Korean Fair Trade Commission (FTC) recently penalized major domestic gaming companies for violating subcontracting laws.
On January 6, the FTC announced corrective measures against Krafton, Nexon, and NCSoft, highlighting the need for these companies to adhere to proper contracting practices.
Krafton and Nexon Korea, facing more severe breaches, were fined 36 million won ($2.4 million) and 32 million won ($2.1 million), respectively.
The violations stem from failure to issue proper contracts for subcontracted work. These contracts, which should detail key terms like payment amounts and methods, were either delayed or omitted entirely during the subcontracting process.
According to the FTC (noted by Chosun), Krafton outsourced 42 tasks, including graphic design and resource creation for its popular game PUBG: Battleground, to 24 suppliers between March 2021 and May 2022. Contracts for these services were issued up to 97 days after work had already begun. In some cases, payments were made only after the contracts had ended.
Similarly, Nexon subcontracted 75 services for its game Bubble Fighter to 12 suppliers over the same period. The company also delayed issuing contracts, with some taking up to 86 days. Like Krafton, Nexon paid some suppliers after the contracts concluded.
Under the Korea’s Subcontracting Act, companies must provide subcontractors with a written agreement detailing the contract terms before the subcontractor begins work. This legal requirement ensures fair treatment and safeguards subcontractors’ rights.
Sources: Chosun.biz