Netflix, on the claim of mutual non-settlement principle
Its just a practice between SKB and key carriers
There is no special agreement to exclude payment, so it cannot be established
SK Broadband vs Netflix 2nd trial new issue, such as the size of the 2nd pleadings, etc.
SK Broadband highlighted its legal status as Netflixs value-added carrier in the battle for network use charges. The battle continued with a new principle of claiming compensation for merchants that compensation should be provided for the business conduct of private companies.
According to the Bill and Keep principle, Netflix greatly reduced the burden on SK Broadbands network, and argued that there was no explicit reservation between the two sides, so there was no need to pay for network use.
The 19-1 Civil Division of the Seoul High Court held the first hearing on the 16th in the second trial for the non-debt confirmation lawsuit filed by Netflix against SK Broadband and the unfair profit return lawsuit filed by SK Broadband against Netflix.
Netflix has introduced a new Bill and Keep principle. A Netflix lawyer argued, “Netflix connection between SK Broadbands is a peering concept, and it is equivalent to Bill & Keep, who does not settle costs because it is judged to be mutually beneficial.”
The logic is that Netflix installed Open Connect Appliance, a cache server, in Tokyo and Hong Kong to reduce the data traffic cost that telecommunication companies have to bear in the international network section with its own network. If a telecommunication company needs it, it can reduce traffic costs by installing OCAs installed in Hong Kong and Japan in Seoul and Busan. In response, SK Broadband offered a counter example, saying that even if OCA is installed in the domestic network, data transmission and IDC use costs are incurred, and that Facebook is paying a fee for similar network use.
SK Broadband persuaded the court based on domestic law. SK Broadbands lawyer argued, “Netflix is a value-added telecommunications company under the Telecommunications Business Act.”
The Telecommunications Business Act stipulates interconnection between key telecommunications companies. The general contract principle and even the access rate are specified through the notification. SK Broadband pointed out that Netflix is the concept of access, which means a general internet connection, and causes confusion with the legal concept of interconnection. Although Netflix misrepresents the legal concept as if it were a mutually non-settlement company as a key telecommunication company, it was clarified that in reality, it was necessary to use the Internet network provided by SK Broadband for a fee as a user status.
SK Broadband supplemented the principle of claiming compensation for merchants through the second trial. Article 61 of the Commercial Act stipulates that “a merchant may claim a substantial remuneration for acts for others within the scope of his/her business.” SK Broadband provided a business activity called a dedicated internet line for Netflix, and since there is no special contract that excludes payment of remuneration, it is logical that Netflix should pay a reasonable price for it. On the other hand, Netflix revealed a time difference by interpreting the fact that it did not sign a clear contract when connecting SK Broadbands submarine cable with Tokyo OCA in the past as an agreement to mutually settle.
The second hearing will be held on May 18th. Presentations will be made on technical issues such as network connection method and submission of evidence.