A South Korean internet service provider has filed a lawsuit against Netflix, asking that the company be ordered to pay for costs caused by a surge of traffic driven by the popularity of the series Squid Game.
The dispute began in 2019, when SK Broadband filed a complaint over Netflix's refusal to pay usage fees with the Korea Communications Commission. The companies failed to reach a settlement, according to a Korea Economic Daily report, leading Netflix to sue SK Broadband in April 2020, seeking a declaration that it was not obligated to pay any extra fees.
In 2021, June the Seoul Central District Court ruled against Netflix, declaring that it is receiving "a service provided at a cost" and that it is "reasonable" that it should pay something for that service. A specific resolution, however, "needs to be determined by negotiations between the parties involved whether or not some fees will be paid, or whether they enter an agreement in accordance with the principle of freedom of contract."
Netflix has appealed that ruling, but Reuters reports that SK Broadband has now filed its own lawsuit against Netflix for rising traffic and maintenance costs. Netflix data traffic on its network is 24 times higher now than it was in May 2018, the company said, driven largely by the phenomenal success of shows like Squid Game. SK Broadband estimated that Netflix owed it roughly 27.2 billion won ($23 million) in usage fees for 2020.
The Reuters report says Netflix is the second-highest data traffic generator in South Korea, surpassed only by YouTube. Yet Netflix and YouTube parent Google are the only companies who don't pay network usage fees—other providers, including Amazon, Apple, and Facebook, all do. Netflix also pays usage fees in other countries, including the US, in order to help ensure priority service.
"We will review the claim that SK Broadband has filed against us," a Netflix rep told TechCrunch. "In the meantime, we continue to seek open dialogue and explore ways of working with SK Broadband in order to ensure a seamless streaming experience for our shared customers."
If you haven't yet hopped aboard the Squid Game train, no matter where you live, we strongly encourage you to do so.
