After Riot Games restricted access to its game services for some PC rooms that deactivated the paid affiliate service on the 11th, the PC room industry is beginning the process of filing a complaint with the Korea Fair Trade Commission. Riot Games says the fees are fair compensation for commercial use, but the industry is pushing back, saying it is "unilaterally shifting additional expense burdens onto Korea's PC room industry without any service improvements."
According to the Korea Internet PC Cafe Cooperative (KIPC) on the 9th, the cooperative plans to hold a rally at 2 p.m. on the 11th in front of the Government Complex Gwacheon and then begin the filing process. The point is that Riot's move to block IP (internet protocol) access or restrict game use on the grounds that the paid affiliate service was terminated constitutes a violation of the Fair Trade Act. KIPC also filed for an injunction to prohibit interference against Riot with the Seoul Central District Court last month over the matter. The hearing for the case will be held on the 17th.
Major game companies sign separate paid partnerships with PC rooms and offer additional in-game benefits. This provides extra in-game perks to PC room users. Riot, too, has run a paid affiliate service since 2011, offering access to all champions and skins. Owners kept the service, expecting it to attract customers even while shouldering additional expense.
The conflict flared in Nov. last year when Riot notified that it would raise paid affiliate service fees by about 15%. Riot was then accused by KIPC before the Korea Fair Trade Commission over the fee hike.
The cooperative and Riot reached a deal in Mar. to expand benefits for affiliate PC rooms, but some owners, balking at usage fees of 2 million to 2.5 million won per store per month, deactivated the paid affiliate service. The dispute intensified again after Riot announced last month it would block game access to those PC rooms. About 500 locations, roughly 10% of all PC rooms, are said to have deactivated it.
Riot says the measure is justified. While individual users can play at home for free, when a PC room owner offers the game commercially on-site, they must pay the copyright holder fair compensation for use, as with music, video, or software, the company said.
However, the cooperative stressed that subscribing to the paid affiliate service is also up to the owner. League of Legends and VALORANT are games anyone can play for free, it argued, so blocking access to the game itself for canceling the paid affiliate service is effectively coercing a contract. It views Riot's access-blocking measure as an abuse of a market-dominant position and an unfair trade practice under the Fair Trade Act.
In fact, on the 21st of last month, Riot carried out access blocks to its games for PC rooms that had canceled the paid affiliate service. Although KIPC had applied for an injunction against Riot, access was blocked before the court ruled. With PC rooms relying on Riot games for as much as 40% of their business, owners ultimately had little choice but to "grin and bear it" and renew the service out of concern for business losses.
What the PC room industry finds more problematic are Riot game servers' repeated outages and the meager benefits. League of Legends has suffered recurring access failures on weekends and holidays, leaving PC room owners to handle user complaints. Unlike in major countries such as the United States and in Europe, the fact that game use at PC rooms has been blocked in Korea alone over the paid affiliate service is another point the cooperative takes issue with.
The cooperative said, "We are not questioning the legitimacy of usage fees themselves; we are objecting to increasing only the expense burden without service improvements and to restricting game use if not subscribed," adding, "Riot is emphasizing that this is the first fee hike in 15 years, but in reality it raised prices while offering an outdated service that is not much different from 15 years ago."
A PC room owner said, "Restricting access to a free game itself is effectively pressure on the distribution channel," adding, "By Riot's logic, YouTube or Netflix should also impose additional expense because they are served in PC rooms, but in practice they do not."