S.Korea broadband agency sues Netflix after visitors surge from ‘Squid Sport’ By Reuters

By Joyce Lee

SEOUL (Reuters) -South Korean Web service supplier SK Broadband has sued Netflix (NASDAQ:) 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 “moderately” 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 should evaluate SK Broadband’s declare, and search dialogue and discover methods within the meantime to work with SK Broadband to make sure clients usually are not affected.

The recognition of the hit collection “Squid Sport” and different choices have underscored Netflix’s standing because the nation’s second-largest knowledge visitors generator after Google (NASDAQ:)’s YouTube, however the two are the one ones to not pay community utilization charges, which different content material suppliers reminiscent of Amazon (NASDAQ:), Apple (NASDAQ:) and Fb (NASDAQ:) are paying, SK mentioned.

Netflix’s knowledge visitors dealt with by SK jumped 24 occasions from Could 2018 to 1.2 trillion bits of knowledge processed per second as of September, SK mentioned, using on the success of a number of Netflix productions from Korea together with “Squid Sport” 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.

Final 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 Web customers, and supply within the Web world is “freed from cost as a precept”, based on court docket paperwork.

However the Seoul Central District Courtroom dominated in opposition to Netflix in June, saying that SK is seen as offering “a service offered at a value” and it’s “cheap” for Netflix to be “obligated to offer one thing in return for the service”.

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

Netflix has appealed in opposition to the ruling, court docket information confirmed, with recent proceedings to begin 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 gained in investments, in addition to an financial impact of about 5.6 trillion gained.

Ruling occasion lawmaker Kim Sang-hee mentioned on Wednesday that out of South Korea’s high 10 knowledge visitors turbines, 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 almost all turning a blind eye to community utilization charges”.

($1 = 1,187.3400 gained)