Netflix Refuses to Pay Fees for Network Use

SK Broadband has filed a counterclaim against Netflix to collect fees from the U.S. company for using its telecommunications network.

SK Broadband announced on Sept. 30 that it has filed a counterclaim against Netflix to collect fees from the U.S. company for using its telecommunications network.

This lawsuit is a follow-up to the previous suit the telecom operator had filed to confirm the absence of its obligations to provide its network to Netflix for free. In the first trial of the first suit, the court ruled in favor of SK Broadband in June 2021.

Having proven that it is not obliged to provide its network to OTT operators such as Netflix for free, SK Broadband has moved to collect network usage fees from Netflix, based on the legal principle of returning unfair gains under the Civil Act.

"Netflix is using SK Broadband's network without paying fees, even though the network is provided for a fee as SK Broadband has made considerable investment to build and maintain it," SK Broadband said, explaining the background of filing the counterclaim. "Despite the first trial ruling, Netflix has not paid a fee for using our network. Therefore, we have decided to file a counterclaim based on the legal principle of returning unfair gains."

"We are suffering losses corresponding to the network usage fees that Netflix does not pay," SK Broadband added.

According to SK Broadband’s claim, the traffic volume on its network generated by Netflix has kept surging exponentially. It soared about 24 times from 50 Gbps in May 2018 to 1,200 Gbps in September 2021. As a result, SK Broadband’s losses have continued to grow.

The court supported SK Broadband's claim. "Netflix is connected to the Internet network through SK Broadband’s paid service," the court said in the first trial. "It is reasonable and fair for Netflix to fulfill its obligation to pay for the service."

However, Netflix has filed an appeal after the court’s first trial ruling against it. SK Broadband has charged Netflix for network use over the past three years in accordance with the law of the right to claim the return of unfair gains.

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