Netflix Countersued By South Korean Firm Following Traffic Surge Due to 'Squid Game'

Netflix Inc. NFLX has been countersued by South Korea’s SK Broadband to pay network usage fees after the streaming giant caused heavy traffic on the internet service provider’s network, Reuters reported Thursday.

What Happened: SK Broadband, a subsidiary of South Korean telecom firm SK Telecom Co. Ltd. SKM, filed the counterclaim after a Seoul court ruled against Netflix. The court dismissed Netflix’s request to confirm it is not liable to pay the network fees to SK Broadband, the report noted.

Netflix filed an appeal against the court decision in July, arguing it has no obligation to pay the fees as SK Broadband is responsible for managing its networks.

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Why It Matters: The surge in traffic on SK Broadband’s network was due to the massive popularity of the Korean action-drama series “Squid Game” and other content from Netflix, as per the report.

SK Broadband reportedly said that traffic from Netflix handled on its network increased exponentially about 24 times from May 2018 to 1,200 Gbps (Gigabits per second) as of September.

Netflix said in February that it plans to invest $500 million in film and series production in South Korea this year to broaden the local content. The company had 3.8 million paid subscribers in South Korea as of 2020 end.

Price Action: Netflix shares closed almost 1.9% higher in Thursday’s trading at $610.34.

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