South Korean Internet service provider SK Broadband is reportedly suing Netflix to pay for increased network costs and maintenance work because of a surge of traffic due to the popularity of Squid Game.
Reuters reports that the company has cited Squid Game and D.P., two popular Korean Netflix dramas, as part of the cause for the increased bandwidth usage in the streaming service.
The move comes after a Seoul court said Netflix should "reasonably" give something in return to the internet service provider for network usage, and multiple South Korean lawmakers have spoken out against content providers who do not pay for network usage despite generating explosive traffic.
The streaming giant shared the following statement with TechCrunch in response to SK’s demands:
“We will review the claim that SK Broadband has filed against us. In the meantime, we continue to seek open dialogue and explore ways of working with SK Broadband in order to ensure a seamless streaming experience for our shared customers.”
The popularity of the survival drama Squid Game, which is on track to become the most-watched show in Netflix’s history in any language, has cemented Netflix's status as the country's second-largest data traffic generator after Google's YouTube.
However, the two are the only ones to not pay network usage fees, while other content providers such as Amazon, Apple and Facebook are paying, according to the South Korean internet service provider.
According to the Reuters report, Netflix's data traffic handled by SK jumped 24 times from May 2018 to 1.2 trillion bits of data processed per second as of September, SK said, riding on the viral popularity of several Netflix productions from Korea.
SK Broadband said it lodged a lawsuit against Netflix for it to pay for using SK's networks since Netflix began using SK's dedicated line starting 2018 to deliver increasingly larger amounts of data-heavy, high-definition video content to viewers in Korea from servers in Japan and Hong Kong.
According to court documents cited in the news report, SK estimated the network usage fee Netflix needed to pay was about 27.2 billion won ($22.9 million) in 2020 alone.
Meanwhile, in a statement released on Wednesday, Netflix said that it contributed to the creation of about 16,000 jobs in South Korea stemming from about 770 billion won in investments, as well as an economic effect of about 5.6 trillion won.
(Banner image via Netflix/Squid Game)