SK Broadband, an internet service provider (ISP) from South Korea has sued Netflix. They demanded Netflix to pay traffic usage fees as the Squid Game series became popular.
The lawsuit was filed after a Seoul court said Netflix should pay ISPs for the networks they use. South Korean regulators have also previously criticized content providers such as Netflix for not paying network usage fees when traffic is very high.
Netflix said it would review SK Broadband's lawsuit, and continue to dialogue and find ways to work with SK Broadband to ensure consumers of both companies are not affected.
Netflix's popularity in South Korea has been steadily increasing, even before Squid Game arrived. The streaming platform from the United States is the second largest data traffic generating platform in South Korea after YouTube.
Even so, SK Broadband said the two companies did not pay for network usage fees. Whereas other technology companies such as Amazon, Apple and Facebook also pay for network usage fees.
SK Broadband claims that their Netflix traffic has increased rapidly, from 50 Gigabits per second in May 2018 to 1,200 Gigabits per second in September 2021. This spike was influenced by the success of Netflix series from South Korea, including Squid Game and D.P.
This case is actually a counterclaim from SK Broadband. Last year, Netflix first sued SK Broadband because they felt they didn't have to pay a fee for using the network because their only obligation was to create content and make it accessible to users.
But Netflix lost the lawsuit, and in June 2021 the Seoul District Court said SK Broadband was deemed to provide a fee-based service so it made sense for Netflix to provide something in return for the service.
Netflix then appealed the ruling, and legal proceedings will begin in December. SK Broadband estimates that the network usage fees that Netflix has to pay in 2020 alone will reach 27.2 billion Won.
Previously a Netflix spokesperson said Squid Game would be their biggest program worldwide. Squid Game also became the first Korean series to become a number one program on Netflix US
