A First for Foreign Internet Business Operator
The Korea Communications Commission (KCC) imposed an arbitrary fine on Facebook with a correction order, saying that Facebook users suffered from a change in access routes to Facebook. It is said that the action is quite meaningful in that the action confirmed a case where a foreign company infringes upon the interests of domestic users for the first time.
This decision is garnering much attention as the decision was made amid global controversy over how telcos, contents providers and users will share the cost of network traffic due to huge traffic caused by content providers such as Facebook, Google, YouTube and Netflix. In particular, it is forecast that this decision will promote in earnest discussions on improving equity for overseas Internet service providers which have been in controversy over free use and reverse discriminations.
The Korea Communications Commission held a general meeting on March 21 and judged that Facebook’s change in its access route to SK Telecom, SK Broadband and LG U+ to lower speed for SK Broadband and LG U+ customers and make trouble for them was an act against the interests of users which is an prohibited act under the Telecommunications Business Act. Therefore, the commission decided to order Facebook to put out an announcement about the correction order, make an improvement to work practices and pay a fine of 396 million won (US$35,600).
Facebook was at odds over network fees with SK Broadband among others and at the end of 2016, arbitrarily shut down domestic access routes and adopted overseas ones. As a result, SK Broadband user's Facebook access speed slowed down. At that time, the speed slowdown ignited the outrage of Broadband users and Broadband users flooded the SK Broadband Call Center with a slew of complaints. SK Broadband temporarily resolved the problem by expanding a costly overseas (Hong Kong) network. The Korea Communications Commission launched an investigation into damage caused by the arbitrary change of the access route and a violation of the Telecommunications Business Act in August last year.
The probe found that Facebook decided to make SKT and LG U+ access Facebook through KT (But SK Broadband connected through Hong Kong). However, with the period of the contract with KT still long, in December of 2016, Facebook changed SKT’s connection route to make it take a detour to Hong Kong. In January and February 2017, Facebook made LG U+ switch to Hong Kong and the US. As SK Telecom's traffic turned to Hong Kong, SK Broadband’s capacity shrank, and some of its traffic was diverted to other international routes. As a result, Facebook access time via SK Broadband became 4.5 times longer (29ms → 130 ms on average). For LG U+ users, the time increased 2.4-fold (average 43ms → average 105ms) as a result of making its wireless traffic detour abroad. User complaints soared 12-fold in the case of SK Broadband and 172–fold in the case of LG U +.
Therefore, the Korea Communications Commission judged that Facebook’s change in the access routes brought about damage to users such as connection failures and slowdowns in speed. The commission also judged that Facebook was able to recognize the fact in advance, and even after confirming the damage after complaints, the social network service giant spent about 10 months without resolving the problem so regarded it as a serious violation of the Telecommunications Business Act and made the decision.
The commission also recommends Facebook to make an improvement to its terms of use, which may be unilaterally disadvantageous to users apart from the correction order.