Webtoon Entertainment, a global provider of digital comics, has targeted over 170 pirate websites worldwide and filed a Digital Millennium Copyright Act (DMCA) subpoena request in the United States District Court for the Northern District of Texas in August 2024. The subpoena ordered Cloudflare, a U.S.-based content delivery network (CDN) service, to provide the personal details of customers operating the infringing websites. Cloudflare has until October 1, 2024, to respond.

Launched in 2004 by Naver Corporation, Webtoon is a South Korean platform that hosts thousands of webtoons and compact digital comics across multiple genres. It has grown rapidly since its global release in 2014, especially with the shift in consumer preferences towards digital content. Based on its recent data, it has approximately 24 million creators and 170 million active monthly users in over 150 countries.

The company successfully debuted on the U.S. Nasdaq stock market on June 27, 2024, but its quarterly earnings report on August 8, 2024, left investors disappointed as revenues were reportedly “flat” compared to 2023. Rather than piracy, the results were largely attributed to the weak exchange rates of the South Korean and Japanese currencies compared to the U.S. dollar. If the currency fluctuations are ignored, year-over-year growth was 11 percent.

Although the earnings report did not explicitly link the underperformance to piracy, the issue was acknowledged by Webtoon CFO David Lee during a conference call. As reflected in a recent Securities and Exchange Commission (SEC) filing, the company views piracy as a major concern.

Webtoon wrote in the SEC filing: “We take various measures to prevent and monitor unauthorized use of our content, including developing proprietary technology to detect piracy and other technological measures. Despite our precautions, unauthorized third parties have copied and distributed our content and sold merchandise and products based on our content and may continue to do so in the future.”

The company noted that if it fails to secure judicial relief or effectively protect and enforce its IP, its “results of operations, financial position, reputation and prospects may suffer.” It added counterfeit merchandise based on their content could also negatively impact revenue and growth, and poor quality of such counterfeits could damage the company’s reputation.

Webtoon’s past experiences with DMCA subpoenas suggest that these legal means can be effective, as it shut down 150 websites after being targeted through a similar subpoena in November 2023. Although many operators hide their real identities, Cloudflare can disable or terminate a user account at its sole discretion if it receives DMCA notifications, determines that the user is a repeat infringer, or for any reason or no reason at all. For websites not registered directly with Cloudflare, the company connects rightsholders with the website operators and hosting providers, as stated on the Assisting Copyright Holders page.

However, DMCA subpoenas also have limitations. While the company continues its aggressive stance against piracy, the digital comics community thinks this is an endless cycle. “You can’t kill piracy,” commented a Reddit user on a post regarding the recent DMCA subpoena. “It’s the Hydra. Slash one of its heads, two others pop up. Give it a week or month at best, and a lot of sites will be back up under a new domain. It’s not as effective as they think.”

- Kristin Jerome Reyna