By Joyce Lee

SEOUL (Reuters). SK Broadband, a South Korean Internet provider has filed a lawsuit against Netflix (NASDAQ.) in order to recover costs incurred due to increased network traffic and maintenance works due to heightened viewing of the U.S. content. A spokesperson for SK stated Friday.

After a Seoul court ruled that Netflix should give “reasonably” something in exchange for its network usage, multiple South Korean lawmakers have condemned content providers who don’t pay for their network usage, even though they are generating a great deal of traffic.

Netflix indicated that it will examine SK Broadband’s claims and open dialogue to determine if there are ways for Netflix to help customers.

SK reported that Netflix has been praised for its popularity with “Squid Game”, and other shows. But, they are not required to pay any network usage fees. This is what other content providers, such as Apple (NASDAQ), Amazon (NASDAQ), and Facebook (NASDAQ), are doing.

SK reported that Netflix’s data traffic increased 240% from May 2018, to 1.2 Trillion bits per second by September 2018. This is due to the popularity of many Netflix Korean productions, including “Squid Game”, and “D.P.”

SK Broadband claimed it filed a suit against Netflix in order to get compensation for the use of SK’s networks. In 2018, Netflix began streaming video from SK’s dedicated line. This allowed it to provide more data-intensive, high-definition content to its viewers in Korea via servers in Japan or Hong Kong.

Netflix brought its own suit last year to determine if it was under any obligation pay SK network usage. Netflix argued that Netflix’s duty is limited to creating and making it available. According to court documents, it said that SK’s costs were incurred in fulfilling its contractual obligations towards Internet users and that delivery to the Internet is “free as a principle”.

However, in June the Seoul Central District Court ruled against Netflix. They argued that SK provides “a service at a cost” so it was reasonable for Netflix to be “obligated” to give something in return.

According to court documents, SK had estimated that Netflix would need to pay 27.2 billion won (or $22.9 million) for network usage fees in 2020.

Netflix appealed the decision, according to court records. New proceedings will begin in December.

Netflix stated Wednesday in a statement that the company contributed to South Korea creating approximately 16,000 jobs through investments totalling about 770 Billion Won. The economic effects of these investments are estimated at 5.6 Trillion won.

Kim Sanghee of the ruling party said Wednesday that 78.5% (or 73.1%) of South Korea’s top 10 traffic sources came from overseas content providers. He also stated that “Google-YouTube, Netflix, and other foreign content providers account for the bulk of traffic that has turned a blindeye to network usage fees.”

$1 = 1,187.3400 won