A South Korean internet service provider has filed a lawsuit against Netflix, requesting that the company be ordered to pay costs caused by a surge in traffic driven by the popularity of the Squid Game series.
The dispute began in 2019, when SK Broadband filed a complaint about Netflix’s refusal to pay usage fees to the Korea Communications Commission. The companies failed to reach a settlement, according to A Korea Economic Daily The report, which prompted Netflix to sue SK Broadband in April 2020, seeking a declaration that it was not obligated to pay any additional fees.
In 2021, in June, the Seoul Central District Court ruled against Netflix, declaring that it was receiving a “cost-provided service” and that it was “reasonable” to pay something for that service. However, a specific decision “needs to be determined by negotiations between the parties involved as to whether or not certain fees will be paid, or whether they enter into an agreement in accordance with the principle of freedom of contract.”
Netflix has appealed this ruling, but Reuters Reports indicate that SK Broadband has now filed its own lawsuit against Netflix over high traffic and maintenance costs. The company said Netflix’s data traffic on its network is 24 times higher than it was in May 2018, driven in large part by the massive success of programs like Squid Game. SK Broadband has estimated that Netflix owes it around 27.2 billion won ($23 million) in usage fees for 2020.
A Reuters report says that Netflix is the second highest source of traffic in South Korea, surpassed only by YouTube. However, Google parent of Netflix and YouTube are the only two companies that don’t pay network usage fees – all other providers, including Amazon, Apple and Facebook, do. Netflix also pays usage fees in other countries, Including the United States, in order to help ensure priority service.
“We will review the claim that SK Broadband brought against us,” a Netflix representative said. Take Crunch. “In the meantime, we continue to seek open dialogue and explore ways to work with SK Broadband in order to ensure a seamless streaming experience for our subscribed customers.”
If you haven’t yet hopped aboard the Squid Game Train, no matter where you live, We strongly encourage you to do so.