[Weekend in Games] Will Nexon Overcome Legal Risks with the FTC and Ironmace?

Nexon is set to face two major legal issues next week. The company will be involved in a 11.6 billion won fine lawsuit against the Fair Trade Commission (FTC) over the controversy surrounding the probability of in-game item drops. In addition, the Supreme Court will rule on the copyright dispute with developer Ironmace over the game "Dark and Darker." As Nexon focuses on regaining user trust, the court's decisions are expected to be more consequential than ever.

Nexon Pangyo Headquarters. Photo by Nexon

According to the gaming and legal industries on April 25, an additional hearing for Nexon's lawsuit to overturn the FTC's sanctions will be held at the Seoul High Court on the 29th. Both sides will each give a 20-minute presentation.

Previously, in January 2024, Nexon filed an administrative lawsuit after the FTC imposed a fine of approximately 11.6 billion won for changing the probability rates of in-game items to the disadvantage of users without notifying them. The ruling was initially scheduled for December 17 last year, but the court postponed the verdict to January 28 this year. Then, the day before, the court changed course, deciding to resume hearings instead of issuing a verdict. This was because a new panel of judges had been formed and determined that further examination was necessary.

As the key issue becomes whether Nexon's actions constituted "deception," an incident involving a paid item probability error in the mobile game "Maple Growing" last January is expected to come under scrutiny. At that time, Nexon implemented a "full refund" policy—unprecedented in both the company's history and the industry—and the top management took direct charge of core intellectual property (IP) management. The industry is closely watching what kind of precedent Nexon's response will set, as efforts to prevent recurrence could influence the calculation of the fine amount.

The following day, the long-standing legal battle between Nexon and Ironmace over the copyright for the online game "Dark and Darker" will come to an end. The dispute began when Nexon claimed that Mr. Choi, a former project leader for "P3" in the new development division, leaked source code and data to a personal server and used them as the basis to establish Ironmace and develop "Dark and Darker." The two sides have been contesting this issue for about five years.

Last year, both the first and second trial courts found that Ironmace had infringed Nexon's trade secrets but did not recognize copyright infringement. The first trial ordered 8.5 billion won in damages, but the amount was reduced to around 5.7 billion won in the appeals trial. The appeals court took a broader view of the trade secrets Ironmace had infringed compared to the first trial, but concluded that the actual damage was not significant. As a result, both sides immediately filed appeals to the Supreme Court without backing down.

Meanwhile, Ironmace recently attracted attention by partially winning the second trial of a separate wage and damages claim lawsuit it filed against Nexon. The ruling found Nexon's HR administration to be unreasonable, focusing on whether the company had violated the Equal Employment Opportunity Act. In this case, a former Nexon planner, referred to as "A," returned to work after parental leave, but the company did not assign A to any project and instead placed A on standby for one year and nine months. The industry is paying close attention to how this ruling might influence the Supreme Court's upcoming decision.

This content was produced with the assistance of AI translation services.