Netflix has filed an appeal against the decision, according to court documents, with new hearings set to begin in late December. SK Broadband, a South Korean Internet service provider, has sued Netflix to recover costs incurred as a result of increased network traffic and maintenance work as a result of increased viewership of Netflix’s content, according to an SK spokeswoman on Friday.
The action comes after a Seoul court ruled that Netflix must “fairly” compensate the internet service provider for network usage, and several South Korean politicians have spoken out against video providers who do not pay for network usage despite producing massive amounts of traffic.
Netflix has stated that it will investigate SK Broadband’s allegation and will seek conversation and explore methods to cooperate with SK Broadband in the meantime to ensure that customers are not harmed.
Netflix’s data traffic handled by SK increased by 24 times from May 2018 to 1.2 trillion bits of data processed per second in September, according to SK, thanks to the popularity of numerous Korean Netflix productions such as “Squid Game” and “D.P.”
Since Netflix began utilising SK’s dedicated line in 2018 to transport ever bigger volumes of data-heavy, high-definition video material to users in Korea from servers in Japan and Hong Kong, SK Broadband has filed a lawsuit demanding that it pay for using SK’s networks.
Last year, Netflix filed its own case to determine if it was obligated to pay SK for network usage, saying that Netflix’s responsibility ended with generating and making material available. According to court records, SK’s expenditures were incurred while fulfilling contractual duties to Internet customers, and delivery in the Internet world is “free of charge as a principle.”
However, in June, the Seoul Central District Court ruled against Netflix, stating that SK provides “a service supplied at a cost” and that it is “fair” for Netflix to be “obligated to contribute anything in return for the service.”
According to the court filing, SK calculated that Netflix will have to pay a network use charge of roughly 27.2 billion won ($22.9 million) in 2020 alone.
Netflix has filed an appeal against the decision, according to court documents, with new hearings set to begin in late December.
Netflix stated in a statement on Wednesday that its investments in South Korea resulted in the creation of about 16,000 jobs, with an economic impact of approximately 5.6 trillion won.
According to ruling party member Kim Sang-hee, foreign content providers accounted for 78.5 percent of South Korea’s top 10 data traffic producers, up from 73.1 percent a year ago, with “Google-YouTube and Netflix that account for the majority turning a blind eye to network use costs.”
Netflix has paid a premium to internet provider Comcast Corp for better streaming speeds in the United States.
Netflix no longer pays Comcast for network access, according to a spokesman, and it collaborates with thousands of internet service providers across the world to reduce network congestion and internet transit costs. 1 dollar = 1,187.3400 won
