Netflix might have to pay millions in bandwidth usage fees in South Korea

South Korean internet service provider SK Broadband is suing Netflix to pay for the increased network costs and bandwidth usage the streaming service’s content has drawn in South Korea, Reuters writes. The company cites Squid Game and D.P., two popular Korean Netflix dramas, as part of the cause.

SK Broadband’s demand for payment isn’t unfounded. A South Korean court sided with the ISP in June, The Korea Herald writes, suggesting Netflix was responsible for the demands its content puts on SK. Counter to Netflix’s request that it not be charged — since customers are the ones streaming, and they already pay for it — the court said the company has “the obligation of paying the price for the services to SK Broadband.” SK estimates the cost at 27.2 billion won (around $23 million) for 2020 alone, according to Reuters.

The Verge has contacted Netflix for comment. The company 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.

Netflix’s success in Korea and in popularizing Korean film and television in the US has come to a head in the last year, and particularly in the last week, thanks to the surprise hit Squid Game. Netflix co-CEO Ted Sarandos said Monday that it was on track to be the company’s most popular show yet, and within four days of its release, it was already number one in the US on Netflix’s top ten chart.

Netflix strikes deals with service providers like Comcast in the US so that its connection gets priority treatment and, ultimately, better video quality. However, Netflix is in a different position now than when it agreed to pay Comcast — it already lost in court, and SK Telecom isn’t incentivized to make a deal while regulators consider a pending Big Cable merger — so even though it has more weight to throw around, it’s also already provided an example of why it might pay in the first place.

(Disclaimer: Comcast is an investor in Vox Media, which owns The Verge.)