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Legal clouds hang over some Web sites

  PLAY AUDIO

May 28,2004
Legal problems are bringing troublesome days for some Internet portal and game companies. Freechal, an Internet community site, was stripped of four of its domains, including freechal.com and freechal.co.kr. The Seoul District Court accepted an application for provisional attachment of the domain names yesterday. Samjung Venture Net, a business consulting company, had requested the seizure, claiming it had not received 460 million won ($390,000) in consulting fees that it should have been given in 2001. Although the Website is still accessible, Freechal will not be able to exercise any rights over the domains. “We will not just stand around until the domain goes up for auction, which is what will happen in the worst-case scenario. If we lose the suit, we’ll just pay Samjung,” Freechai said. Freechal currently has 12 million members in 1.1 million Internet communities. Although it was once one of the leading portals, recent competition has left it behind, and the company had been planning to make a large investment to revamp its Website. Bugs Music, the country’s dominant online music service firm with more than 14 million members, is also under a cloud. Last month, the Seoul Central Court announced the provisional seizure of corporate shares held by its president, Park Sung-hoon, who owned 50 percent of Bugs’ shares. As a result, the company will have difficulty in negotiating with large companies that were planning to acquire the firm. It will also have to reconsider its plans to move its headquarters to China. Last year, the court had allowed 12 musical recording companies to temporarily seize 1.56 billion won worth of property because the online music company had posted songs on the Internet without paying royalties to the copyright owners. The Web site offers a free streaming service for a wide range of music genres. Last week, 1,060 players of the online games Lineage and Lineage 2 filed a suit against the game’s developer, NC Soft, Korea’s largest Internet game maker. They claimed that the game fees were too high and that the company had been inattentive to technical and ethical problems involving the game. NHN, a company that manages the portal site Naver, was also recently sued for using the term “cafe” to describe its Internet communities. The court, however, ruled that NHN was on safe ground. Despite the legal struggles of some Internet companies, most are enjoying a promising business. Most internet-related shares rose on the technology-heavy Kosdaq market yesterday, including Auction, whose shares gained more than 5 percent, and portal site operators Daum Communication and Neowiz. NHN rose 7.2 percent yesterday while NC Soft gained 6.4 percent, indicating that the legal skirmishes did not seem to be affecting the market leaders’ stocks. by Wohn Dong-hee


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