The Netflix and SK Broadband lawsuit was the first major court fight anywhere over whether a streaming service must pay an internet provider for the traffic its subscribers generate. Netflix filed the case in South Korea in 2020, lost the initial ruling in June 2021, appealed, and then settled in September 2023 by folding the dispute into a commercial partnership with SK Broadband and its parent SK Telecom. The financial terms were never disclosed, and the underlying legal question about mandatory network usage fees was left unresolved by the courts.
What Netflix and SK Broadband Were Fighting About
The dispute grew out of South Korea’s “sending party network pays” model, adopted through 2016 amendments to the Telecommunications Business Act. Under that framework, ISPs compensate each other based on the volume of traffic they exchange, which in turn puts pressure on heavy-traffic content providers to pay ISPs for delivering data to end users, even though those users already pay for broadband.
South Korea tightened the screws in 2020 with the so-called “Netflix Law,” which required content providers with more than one million daily users and at least one percent of national internet traffic to take “service stabilization measures.” In practice, that meant negotiating network usage fees with ISPs.
Netflix pushed back. In 2020 it sued SK Broadband, arguing it had no obligation to pay the fees and that charging a content provider for delivery to paying subscribers violated net neutrality.
The June 2021 Ruling Against Netflix
On June 25, 2021, the Seoul Central District Court ruled for SK Broadband. The court held that the ISP had the right to request payment from Netflix under principles of “freedom of contract and fairness.” It was the first time a South Korean court had recognized an ISP’s authority to charge a content provider for network usage.
The timing hurt. Months later, Squid Game became a global phenomenon and drove a surge of streaming traffic across Korean networks. SK Broadband estimated that show alone added 27.2 billion Korean won, roughly $23 million, to its network expenses.
The Counterclaim and Appeal
SK Broadband moved to collect. It demanded $22.9 million in fees for 2020, and when Netflix did not pay, it filed a counterclaim in October 2021 asking a court to order payment. Netflix appealed the June ruling on November 5, 2021.
The appeal never produced a decision.
The September 2023 Settlement
On September 18, 2023, Netflix, SK Broadband, and SK Telecom announced they would drop all pending lawsuits and enter what they called a “strategic partnership.” The companies said they would offer bundled mobile and IPTV packages that included Netflix’s ad-supported tier, with products planned for the first half of 2024, and would collaborate on AI features such as personalized recommendations and conversational interfaces.
Neither side disclosed what money changed hands. An SK Broadband official told reporters that “our position on the necessity of network usage fees remains unchanged,” but that both companies had agreed to withdraw all disputes “in the interests of the greater success of both companies.” Industry sources described the outcome as an “invisible agreement” rather than a legal judgment. Local executives estimated the partnership’s value to SK Broadband at as much as 40 billion Korean won, about $30.2 million.
What the Settlement Left Unresolved
Because the appeal was withdrawn as part of the deal, no higher court ever tested the June 2021 finding that an ISP can charge a content provider for network usage. The district court ruling stands as the only Korean judicial pronouncement on the question, and the net neutrality argument Netflix raised was never adjudicated on appeal. That silence has shaped everything that followed: legislators, regulators, and other ISPs in Korea have continued to press for network fees without a definitive court ruling either backing them or knocking them down.
Fallout for Other Streaming Services
The Netflix case emboldened Korean legislators and ISPs. Disney reportedly delayed the South Korean launch of Disney+ to reassess its business strategy before agreeing to pay network usage fees.
Twitch went further. In December 2023, the Amazon-owned livestreaming platform announced it would shut down its South Korean operations entirely on February 27, 2024. CEO Dan Clancy said network fees in Korea were “10 times more expensive than in most other countries” and that the company had been operating at a “significant loss” with “no pathway forward” for sustainability. Twitch had already capped source quality at 720p and experimented with peer-to-peer delivery to cut costs. Neither was enough.
After the shutdown, the Korea Communications Commission fined Twitch 435 million won ($327,067) for suspending its video-on-demand service in a manner the regulator said “undermined the interests of users,” plus an additional 15 million won for failing to implement measures against illegal video distribution.
The Broader Korean Framework
South Korea’s “sender pays” regime stands nearly alone among major economies. As of 2025, the largest traffic generators on Korean networks were Google and YouTube at 30.6 percent of national internet traffic, Netflix at 6.9 percent, and Meta at 5.1 percent. A 2025 legislative estimate suggested Google’s potential unpaid network usage fees could run from 214.7 billion to 347.9 billion Korean won a year, roughly $146 million to $236 million.
Three bills were pending in the 22nd National Assembly as of June 2026, all aimed at what legislators call “network free-riding.” An earlier consolidated proposal nicknamed the “Netflix Free Ride Prevention Act” was introduced in September 2022 by Representative Young-chan Yoon. Progress has slowed, in part because of potential trade friction with the United States.
Critics of the Korean model note that the country’s three largest ISPs control 86 percent of the domestic pay TV market, which creates a competitive conflict of interest when those same companies charge streaming rivals for access to their networks. Research on the framework has reported that transit prices in Seoul run eight to ten times higher than in comparable cities like London or Frankfurt, and that local content providers face higher delivery costs often passed on to consumers.
International Pushback
The U.S. Trade Representative has warned that mandatory network fees imposed on foreign content providers could be “anticompetitive” and function as a “global trade barrier.” The Body of European Regulators for Electronic Communications concluded in 2023 that network usage fees are neither necessary nor desirable in Europe, citing risks of market failure and net neutrality violations.
For readers tracking where the Netflix and SK Broadband lawsuit sits today: the case itself is over, closed by private agreement. The policy fight it triggered is not.