On September 18, Netflix and South Korea’s telecommunications company SK Telecom, together with its subsidiary SK Broadband, announced the establishment of a strategic partnership that “will end all disputes” between the two companies, which had been involved in a conflict since 2020. The dispute arose when SK detected a very significant increase in Internet traffic that was largely due to Netflix’s release of the series Squid Game. A South Korean court entered a judgment in favor of the local operator ordering Netflix to cover the cost of Internet traffic increase.
According to the press release, the agreement contemplates the inclusion of Netflix packages in the South Korean operator’s offering, “technological collaboration”, as well as joint exploration of artificial intelligence opportunities. No further details were given. The aim of the partnership is to “provide better entertainment experiences to their customers.”
The lawsuit Netflix and SK Telecom were parties to had become a beacon followed by telecommunications operators suggesting that the main streaming platforms should make economic contributions to the cost of network deployment and upkeep. In Europe, regulatory agencies are already working on a solution, while in Latin America the discussion is in a less advanced stage. With this parallel agreement, which does not include any terms related to the payment of network costs, Netflix and SK Telecom avoid setting a precedent on the issue on a global scale.