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Korean Lawmakers Pushing for Taxes on Netflix
To Create a Level Playing Field
Korean Lawmakers Pushing for Taxes on Netflix
  • By Jung Suk-yee
  • April 1, 2019, 08:36
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The South Korean government is considering imposing taxes on Netflix services to address discrimination against Korean paid TV services.

Controversy is brewing again over reverse discrimination against South Korean paid broadcasting services with Netflix becoming more and more popular in South Korea, where the number of Netflix subscribers exceeded 2.4 million in February. Under the circumstances, the South Korean government is considering imposing taxes on Netflix services and the National Assembly is working on various legislative actions.

Liberty Korea Party lawmaker Yoo Min-bong recently proposed an amendment to the Telecommunications Business Act so that duties for service quality maintenance can be imposed on global content providers such as Netflix. Earlier, Democratic Party lawmaker Byeon Jae-il proposed a bill compelling global Internet service providers to install their servers in South Korea. In January this year, Democratic Party lawmaker Kim Sung-soo tabled an amendment to the Broadcasting Act to cover over-the-top media services.

The bills have been proposed with regard to the fact that foreign service providers such as Netflix and YouTube are subject to less regulations and responsibilities than their South Korean counterparts. At present, Naver pays tens of billions of won a year to use mobile carriers’ networks whereas the foreign service providers are using the networks for free. Recently, the Netflix original series Kingdom attracted a large number of users, resulting in a service delay and international line extension. The cost of the extension was borne by South Korean mobile carriers.

When it comes to content review regulations, the foreign service providers are taking advantage of legal loopholes. Especially, over-the-top service providers, which are classified as value-added common carriers according to the Telecommunications Business Act, do not have to go through content review unlike general broadcasting stations.

The bills are currently pending at the Science, ICT, Broadcasting, and Communications Committee of the National Assembly and have yet to be deliberated in depth. Besides, details of the bills are not free from disputes. In the amendment regarding over-the-top media services, for instance, prior registration is required on the part of local firms providing real-time broadcasts whereas Netflix is on a notification basis, which means the former have to be subject to tighter regulations.