The debate over "holdback" -- the waiting period before a theatrical release becomes available on OTT platforms or IPTV -- is showing signs of escalating into an antitrust issue.
On Tuesday, the Citizens Coalition for Consumer Sovereignty submitted a formal inquiry to the Korea Fair Trade Commission, questioning whether a voluntary holdback agreement among industry players restricts competition and could harm consumers. The group's core argument is that even though the holdback deal is a nonbinding "voluntary agreement" without legal force, businesses jointly setting a fixed period can, in effect, create an industry standard that limits both the timing of film releases and competition among platforms.
In May, the government formed a public-private council bringing together film production, distribution and exhibition companies along with IPTV and major OTT platforms to discuss the holdback issue and other pending matters. The tentative "Voluntary Holdback Agreement for Win-Win Growth in Korean Film" was originally slated for announcement last month. It reportedly sets a holdback period of 120 to 150 days, with exceptions for individual titles. However, the issue remains unresolved as stakeholders have failed to narrow their differences.
Article 40 of the Monopoly Regulation and Fair Trade Act defines the act of two or more businesses jointly setting trading conditions or timing as "unfair collaborative conduct." The Citizens Coalition for Consumer Sovereignty argues that production costs, break-even points and licensing terms vary from film to film. Yet having the entire industry share the same supply-timing standard could be read not as individual business judgment but as a joint restriction on trade.
"If the industry limits only the timing of OTT and IPTV availability without addressing structural problems such as high ticket prices, content shortages and screen concentration, the cost and inconvenience could simply be passed on to consumers," the group said. "Applying a uniform holdback even to films that failed to secure adequate theatrical screening opportunities could further limit the ability of small and independent films to reach audiences and recoup revenue."
This concern echoes a joint news conference held late last month by the Committee on Public Livelihood and Economy of Lawyers for a Democratic Society, the Ansan Consumer Organizations Council and the People's Solidarity for Participatory Democracy, which said, "While the industry is moving quickly on a holdback agreement that restricts consumer choice, long-standing concerns over settlement transparency remain unresolved."
The Citizens Coalition for Consumer Sovereignty also noted that the government mediated the agreement through the Ministry of Culture, Sports and Tourism and the Korean Film Council, among other bodies. It said that mediation does not exempt the deal from review by the Fair Trade Commission. The inquiry asked, "Even if the government leads an agreement among businesses on holdback for policy purposes, is it the Fair Trade Commission's position that the deal can still be reviewed under the Fair Trade Act if it produces anti-competitive effects?"
Earlier, Democratic Party of Korea Lawmaker Lim Oh-kyung sponsored a proposed amendment to the Motion Pictures and Video Products Act that would mandate a six-month holdback period. While the bill was under review by a National Assembly standing committee, the Fair Trade Commission urged caution, saying a uniform mandate could hurt OTT competition and consumer welfare.
"Whether businesses in competition with each other can jointly set the same distribution timing under the Fair Trade Act is a question that has never been fully tested," an industry official said. "A clear ruling from the Fair Trade Commission needs to come before any agreement is signed."
balme@heraldcorp.com
