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S.Korea broadband agency sues Netflix after visitors surge from ‘Squid Game’

SEOUL, Oct 1 (Reuters) – South Korean Internet service supplier SK Broadband has sued Netflix (NFLX.O) to pay for prices from elevated community visitors and upkeep work due to a surge of viewers to the U.S. agency’s content material, an SK spokesperson mentioned on Friday.

The transfer comes after a Seoul court docket mentioned Netflix ought to “reasonably” give one thing in return to the web service supplier for community utilization, and a number of South Korean lawmakers have spoken out in opposition to content material suppliers who don’t pay for community utilization regardless of producing explosive visitors.

Netflix mentioned it is going to evaluate SK Broadband’s declare, and search dialogue and discover methods within the meantime to work with SK Broadband to make sure prospects are usually not affected.

The reputation of the hit sequence “Squid Game” and different choices have underscored Netflix’s standing because the nation’s second-largest information visitors generator after Google’s YouTube, however the two are the one ones to not pay community utilization charges, which different content material suppliers similar to Amazon, Apple and Facebook are paying, SK mentioned.

Netflix’s information visitors dealt with by SK jumped 24 occasions from May 2018 to 1.2 trillion bits of knowledge processed per second as of September, SK mentioned, driving on the success of a number of Netflix productions from Korea together with “Squid Game” and “D.P.”

SK Broadband mentioned it lodged a lawsuit in opposition to Netflix for it to pay for utilizing SK’s networks since Netflix started utilizing SK’s devoted line beginning 2018 to ship more and more bigger quantities of data-heavy, high-definition video content material to viewers in Korea from servers in Japan and Hong Kong.

Last yr, Netflix had introduced its personal lawsuit on whether or not it had any obligation to pay SK for community utilization, arguing Netflix’s responsibility ends with creating content material and leaving it accessible. It mentioned SK’s bills had been incurred whereas fulfilling its contractual obligations to Internet customers, and supply within the Internet world is “free of charge as a principle”, in response to court docket paperwork.

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The Netflix sequence “Squid Game” is performed on a cell phone on this image illustration taken September 30, 2021. REUTERS/Kim Hong-Ji/Illustration

But the Seoul Central District Court dominated in opposition to Netflix in June, saying that SK is seen as offering “a service provided at a cost” and it’s “reasonable” for Netflix to be “obligated to provide something in return for the service”.

SK estimated the community utilization charge Netflix wanted to pay was about 27.2 billion received ($22.9 million) in 2020 alone, the court docket doc mentioned.

Netflix has appealed in opposition to the ruling, court docket information confirmed, with contemporary proceedings to start out in late December.

Netflix mentioned in a press release on Wednesday that it contributed to the creation of about 16,000 jobs in South Korea stemming from about 770 billion received in investments, in addition to an financial impact of about 5.6 trillion received.

Ruling celebration lawmaker Kim Sang-hee mentioned on Wednesday that out of South Korea’s high 10 information visitors mills, 78.5% of the visitors got here from international content material suppliers, up from 73.1% a yr earlier, with “Google-YouTube and Netflix that account for the majority turning a blind eye to network usage fees”.

In the United States, Netflix has been paying a charge to broadband supplier Comcast Corp (CMCSA.O) for over seven years for quicker streaming speeds. https://reut.rs/2Y8wOzb

($1 = 1,187.3400 received)

Reporting by Joyce Lee, Additional reporting by Nivedita Balu in Bengaluru; Editing by Raju Gopalakrishnan and Anil D’Silva

The Netflix logo is seen on their office in Hollywood, Los Angeles, California, U.S. July 16, 2018. REUTERS/Lucy Nicholson/File Photo

The Netflix series

The Netflix logo is seen on their office in Hollywood, Los Angeles, California, U.S. July 16, 2018. REUTERS/Lucy Nicholson/File Photo