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Supreme Court of Korea Ruled Music DRM Does Not Violate Competition Law – Abuse of Dominant Market Position in Mobile Phone and Music Download Service

There have been disputes as to whether Digital Rights Management(DRM) does violate competition law.  By using a DRM, the company can tie the playback of certain digital files to its own IT device.  The problem arises when the company has a dominant market position, because it entails an argument from competitors that the company has abused its dominant market position to distort a free competition at the market.

In November last year, the Supreme Court of Korea firstly issued a ruling addressing this issue.  The case dates back to 2006, when Fair Trade Commission(FTC) of South Korea ordered SK Telecom, the largest mobile carrier company and music download service provider, to lift up a DRM which had prevented the purchasers of MP3 mobile phone of SK Telecom from playing MP3 files downloaded from other online music store that SK Telecom does not operate.  SK Telecom had appealed the FTC’s decision to the court.

At the heart of this lawsuit lies the issue of whether SK Telecom’s use of DRM does constitute an abuse of its dominant market position under Korean Competition law.  In this regard, the Monopoly Regulation and Fair Trade Act(MRFTA) of Korea provides that any market dominant enterpriser shall not commit an act of either (i) unreasonably interfering with the business activities of other enterprisers or (ii) unreasonably doing considerable harm to the interests of consumers.  The FTC found SK Telecom’s using a DRM Continue reading