The Seoul Administrative Court ruled in favor of Facebook in the first ruling of the administrative litigation between Facebook and the Korea Communications Commission (KCC).
The KCC imposed a fine of 396 million won on Facebook in March 2018, claiming that it caused a decrease in connection speed by arbitrarily changing its server connection route in South Korea from KT to Hong Kong. In response, Facebook filed an administrative suit, saying that the modification was a type of business strategy for cost reduction and it had no intention at all to cause users’ inconvenience.
The result of the litigation has to do with systemic loopholes. The court reconfirmed that not content providers (CPs) but Internet service providers (ISPs) such as mobile carriers are responsible for a decrease in Internet service speed, saying, “According to the current law, a CP has no obligation to provide at least a certain level of network communications quality, not to change its connection route, or to have a prior discussion with an ISP in order to change it.”
During the litigation, the KCC asserted that the change made by Facebook constituted a deed limiting or blocking the subscription to and use of a telecom service in an arbitrary way, which is prohibited by the Telecommunications Business Act. The court, however, ruled that the change did not limit the use although it caused some inconvenience and delay in use and that the KCC’s fine calculation was not objective enough.
The South Korean government and the local telecom industry are perplexed. They are expressing concerns that the ruling will lead to global CPs’ high-handedness. Facebook changed the route between late 2016 and early 2017, when it was calculating network fees with local mobile carriers such as SK Broadband and LG U+. This is why suspicions were raised that Facebook intentionally changed the route in order to get the upper hand in the negotiations. After the change in route, a large number of users complained about a slower connection to Facebook and SK Broadband had to install more servers not to lose its customers.
At present, Facebook is in network fee negotiations with LG U+ while Google, YouTube and Netflix are using South Korean mobile carriers’ servers nearly free of charge. The global CPs can change their service connection routes at any time, and then the following complaints go to none other than the mobile carriers. This means such arbitrary changes can be repeated at any time.
The government is planning to address the loopholes without delay while lodging an appeal. Specifically, it is going to compel global CPs to take measures for user protection and service quality maintenance. At the same time, the government is going to take action to eliminate discriminations between those global and local CPs. “The same regulations must be applied to the two sides,” the KCC emphasized. This remark implies that the KCC cannot regulate the latter unless it can hold Facebook accountable.