The success of The Squid Game, one of Netflix's latest series, has caused demand for the network to skyrocket in South Korea. This affected SK Broadband, the main internet provider in the Asian country. This company sued Netflix for the streaming service to bear the costs for the “increase in network traffic and maintenance work”, as revealed by Reuters.
SK Broadband's lawsuit came days after a Seoul court deemed it feasible for Netflix and other streaming services to pay an extra fee to internet service providers for the high consumption of network traffic. Netflix, at first, claimed to be studying the demand and working to reach an agreement with the South Korean company. Finally, the company has rejected the lawsuit assuring that Netflix is not the one who should take care of these payments.
Dean Garfield, vice president of public policy at Netflix, has confirmed to Bloomberg that the financial impact of a fee for network use could grow “exponentially” over time . In addition, these rates would create “an unfair and anti-competitive environment”, since it is the internet providers who set the prices.
Netflix assures that they could not pay a fee for the use of the network
For consumers, it would also have consequences. Garfield assures that the prohibitive prices of these rates would not be economically viable for the company . Suggesting, therefore, that it would be the Korean customers who would have to pay that extra cost. Possibly, with an increase in the subscription price.
The amount requested by SK Broadband was 27.2 billion won (about 23 million dollars ), according to The Korea Times. This amount includes the expenses of using the internet throughout 2020. It represents, according to the aforementioned medium, 6% of Netflix's income in South Korea. The internet provider, for its part, assures that it is unfair that South Korean companies are paying a fee and Netflix refuses to do so.
Curiously, the streaming company has been open to agreements to improve the use of the network on several occasions . A few months ago, for example, Netflix agreed to limit streaming quality in several countries. The objective? avoid a collapse in the network during the months of confinement due to the restrictions imposed to prevent the spread of the coronavirus.
