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MoreKorea’s AI Basic Act Six Months On: Disclosure and Labeling Duties for Generative AI Businesses
Korea’s AI Basic Act took effect on January 22, 2026. Under the Act, businesses that provide generative AI products or services are subject to transparency obligations. Compliance, however, does not end with adding a notice to a service screen. The applicable legal risks depend on the AI model used, the information entered by users, where that information is transferred, and how the generated output is used. Advance Disclosure and Output Labeling Are Separate Obligations Article 31 of the AI Basic Act divides transparency obligations into two categories. First, an AI business operator intending to provide a product or service based on generative AI must inform users of that fact in advance. Second, when generative AI or an AI-powered service produces content, the business must indicate that the output was generated using AI. For example, a chatbot or AI document-generation service may need to disclose its use of generative AI through its terms of service or user interface before the
Why AI Startups in Korea Need IT Legal Counsel
Before you build, make sure your service is structured to survive legally — not just technically. The Best Time for Legal Advice Is Before You Launch Getting an AI model up and running, connecting APIs, and opening a beta service can happen surprisingly fast. But building a service that is legally sustainable — one that properly addresses data use, privacy, copyright, and liability — is an entirely different challenge. Legal counsel is most effective not after development, but at the service planning and data architecture stage. A last-minute terms review before launch is a patch, not a solution. The following questions need to be answered before you write a single line of code. What data can you legally collect, store, and use for training? Is it legally safe to use customer data for model fine-tuning? Who owns the copyright to AI-generated outputs, and who is liable when things go wrong? Building a service without addressing these questions means going to market with structural vul
