Featured in Bloomberg: Netflix, Korea Broadband Settlement May Signal Funding Trend
Roslyn Layton was featured in Bloomberg Law on the settlement in Netflix v. SK Broadband. The article observes,
A settlement between Netflix Inc. and SK Broadband Inc. for network usage fees in South Korea concludes a five-year dispute that’s seen as a bellwether for fair proceedings underway in the US, India, Thailand, Indonesia, the Caribbean, and Brazil.
In South Korea, the victory of SKB against global behemoth Netflix was seen as a David and Goliath battle. The court declared the case a straightforward business-to-business dispute and balked at Netflix’s arguments it had no obligation to negotiate or pay for use of another’s network, and that traffic delivery is free.
Netflix appealed the decision, and SKB lodged a countersuit of unjust enrichment. While a non-disclosure agreement masks the exact amount Netflix paid to SKB (which likely includes the cost of undersea cables from other Asian countries and other investments in capacity), it’s clear SKB won the second round.
The developments over 10 courtroom hearings show Netflix folded in the face of the court’s reasoning, public opinion, and pressure from South Korea’s National Assembly.
Under the rubric of the Network Free Ride Prevention Act, seven bills introduced in the assembly proposed to address purported abuse by foreign content providers over usage fees that have long been paid by Korean firms.
Contrary to claims such usage fees would be harmful, they allow Netflix to improve its product, expand distribution, and reduce churn.
Reproduced with permission. Published October 27, 2023. Copyright 2023 Bloomberg Industry Group 800-372-1033. For further use please visit https://www.bloombergindustry.com/copyright-and-usage-guidelines-copyright/
Read the full article on Bloomberg Law.
Order the report written by Roslyn Layton Netflix v. SK Broadband. The David and Goliath Battle for Broadband Fair Cost Recovery in South Korea.