Under the current Act, where a game product related business entity distributes illegal game products, etc., or fails to comply with matters to be observed, an order for suspension of business for a period of up to six (6) months or closure of business may be issued. Provided, however, that in case a game product related business entity violates permission/registration standards or certain matters to be observed prescribed in the current Act, a penalty surcharge of up to 20 million won may be imposed in lieu of suspension of business as prescribed by Presidential Decree.

Due to the fact that cases where a penalty surcharge may be imposed as a substitute are limited and there is a lack of standards for imposition of a penalty surcharge, such substitution is not being actively utilized administratively, with the result that a business entity subject to suspension of business and small and medium-sized business entities working in cooperation with such a business entity receive significant damages, etc., which act as obstacles to their normal business activities.

Therefore, this proposal aims to provide standards for determining when a penalty surcharge may be imposed, in principle, in lieu of suspension of business in cases where there are concerns that a large number of users will experience significant inconvenience due to suspension of business or that there will be significant damages to small and medium-sized business entities, thereby preventing damages to users and small and medium-sized business entities in advance. (Article 36 (2), newly inserted, etc.)

Article 36 (Imposition of Penalty Surcharge)

(1) (Same as the current Act)

(2) When the Special Self-Governing City Mayor, Special Self-Governing Province Governor, and the head of a Si/Gun/Gu imposes a penalty surcharge to a business entity subject to suspension of business according to paragraph 1, in case any one of the following subparagraphs apply, a penalty surcharge shall be imposed, in principle, in lieu of suspension of business.

1. Case where there are concerns that the suspension of business shall result in extreme inconvenience to a significant number of consumers in a transaction relationship with the business entity subject to the suspension of business and/or a significant number of users related to the violating business entity

2. Case where there are concerns that the suspension of business shall result in damages to a significant number of small and medium-sized business entities in a transaction relationship with the business entity subject to the suspension of business.