Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Court rules against Netflix in network usage fee dispute
The Seoul Central District Court ruled, Friday, that Netflix should pay SK Broadband for using its network to stream contents. Korea Times file
By Yi Whan-woo
By Yi Whan-woo
A local court ruled against Netflix in a dispute with SK Broadband, Korea's leading high-speed internet company, over whether the global streaming giant has been getting a “free ride” on SK's networks to provide contents.
The Seoul Central District court held Netflix accountable for causing heavy traffic on SK Broadband's networks amid a rapid increase in the number of subscribers in recent years.
It asked Netflix Services Korea, the Korean division of the U.S. company, to share costs with SK Broadband in upgrading and expanding networks for Netflix users.
The court, however, did not specify the exact amount to be settled, and instead, asked the two parties to deal with the matter on their own.
“This is a matter to be determined by the involved parties, not us,” the court said.
Filed by Netflix Services Korea in April 2020, the civil lawsuit sets the legal basis for relevant businesses, notably the content providers (CPs) and internet service providers (ISPs).
The popularity of over-the-top (OTT) media and other forms of video streaming service is attributed to a surge in traffic and also an increase in maintenance costs.
But there has been no clear criteria on who should take on the added financial burden.
Industry sources speculate two other major ISPs here _ KT and LG UPlus _ may also ask Netflix to share costs for using their respective networks.
Other possible targets are Google, which runs YouTube, as well as Disney that seeks to enter the OTT market here.
According to a National Assembly data, Google accounted for more than 25 percent of the total traffic of SK Broadband, KT and LG UPlus, dwarfing those of local internet behemoths Naver (2.5 percent) and Kakao (1.8 percent).
The sources said the CPs could pass on the increased cost burden to consumers.
The Netflix-SK Broadband dispute dates back to November 2019 when the number of Netflix subscribers here surpassed 2 million, a fivefold increase compared to February 2018.
With the surge in traffic, SK Broadband asked to share relevant costs, but Netflix Services Korea declined, saying retail subscribers using SK Broadband's internet already pay for the bandwidth and that charging additional fees would amount to “double charging.”
The Korean arm of Netflix argued that SK Broadband is responsible for maintaining quality connection services.
SK Broadband previously brought the case to the Korea Communications Commission (KCC), which is a government body that regulates the media industry. But KCC failed to settle the dispute. Netflix then took the case to the Seoul Central District Court.