Netflix appeals against first trial defeat in Seoul over network fees

2021.07.16 13:30:24 | 2021.07.16 13:31:13

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Netflix has filed an appeal against a Seoul court ruling that was recently given in favor of SK Broadband in their legal battle over network usage fees.

Netflix Services Korea, the South Korean subsidiary of the U.S. video streaming giant, said Thursday that it filed a petition of appeal against a ruling by the Seoul Central District Court last month. The court had dismissed Netflix’s request to confirm that it is not liable to pay fees for using SK Broadband’s network.

“The first trial ruling denies division of roles between a content provider and internet service provider (ISP) that underpins cooperation between the two parties, which could threaten internet ecosystem and principle of network neutrality,” said Netflix in a statement. “The ruling should also make it fair for a Korean company to pay network usage fees to an American ISP if American users enjoy Korean services.”

SK Broadband immediately refuted, warning that it could file a countersuit. “If Netflix continues to deny its network fee payment obligation despite the first trial ruling, we will bring a counter action,” the company said.

With no sign of agreement between the two parties, their legal battle is expected to last longer than expected.

SK Broadband, a subsidiary of the country’s leading wireless carrier SK Telecom, accuses Netflix of free-riding on its network and causing traffic overload. It points out that the California-based streamer pays network fees in the U.S. and France but not in Korea, whereas local platform service providers Naver and Kakao pay it fees.

But Netflix argued it is using its own content network called Open Connect, thus it does not stress SK Broadband’s network system. It logs on to the server installed in Tokyo and Hong Kong via SK Broadband’s network but doesn’t use the network to transfer data and should not be liable to pay extra fees.

By Lee Yong-ik and Choi Mira

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