The Seoul Central District Court ruled against global over-the-top (OTT) media service giant Netflix in its prolonged network usage fee dispute with SK Broadband, South Korean Internet Service Provider (ISP), on June 25.
Netflix Services Korea, the Korean division of the U.S. company, has filed a lawsuit against SK Broadband that to confirm that Netflix is not obliged to provide network usage fees.
Regarding Netflix's request, the court said, "Netflix should be obliged to pay the price because it should be considered being connected to SK Broadband's Internet network or at least being provided with a function of connecting and maintaining connection status."
The court did not specify the exact amount of fees to be settled, said, "It is a matter that will be determined by negotiations between the parties whether to sign a contract or pay for it."
"SK Broadband estimates that Netflix will have to pay KRW 1.5 billion won in 2017 and KRW 27.2 billion won in 2020," the court added. "Although SK Broadband will have operating profits such as an increase in the number of subscribers due to the smooth provision of Netflix services, it is not confirmed whether it is worth offsetting large investment costs."
"This decision clearly confirms by law that Netflix needs to pay network usage fees to SK Broadband," SK Broadband said in a statement.
The court also thought differently about Netflix's claim that "there is no content provider in the world paying for the network usage fee that SK Broadband requires."
Based on a confirmation submitted by Netflix to the U.S. Federal Communications Commission (FCC) in 2014, the court said, "it was confirmed that Netflix paid U.S. ISPs such as Comcast, AT&T, Verizon, and TWV for its payment of use of the call network."
Meanwhile, according to the industry, the discrimination between overseas content providers (CPs) and Korean content providers on the payment of network usage fees has been pointed out.
Korean Internet giants Naver and Kakao are paying tens of billions of won in Internet usage fees per year to Korean ISPs, however, overseas CPs are not paying any network usage fees, a report showed.
The results of the trial are expected to be used as a basis for demanding network usage fees from overseas major global internet giants such as Google, Facebook, and other overseas CPs including Disney Plus, and Amazon Prime, which are seeking to advance into Korea.
