[THE INVESTOR] Global social network giant Facebook has asked a local court to suspend the 396 million won (US$361,000) fine imposed by the Korea Communications Commission, according to industry sources on May 17.

Facebook claims that the charges for which the Korea Communications Commission issued the fine were “unintentional.” The KCC -- the country’s telecom authority -- said it expected the move from Facebook. “We will wait for a rational ruling,” said an official.

The court’s review will begin on May 18. 

Kevin Martin (left), Facebook’s vice president for mobile and global access policy, meets Korea Communications Commission Chairman Lee Hyo-seong in January.
KCC

On March 21, the KCC imposed the fine and a correction order for slowing down certain internet connections in 2016 and 2017. KCC said Facebook, which has 14.5 million users in Korea, intentionally limited the connection for those on the networks provided by SK Broadband and LG UPlus. Since 2016, the US social networking giant has been mired in a dispute with the two companies over network usage fees, and the slowdown was seen as Facebook’s tactic to get the upper hand in negotiations with the Korean companies.

Facebook pays an annual 15 billion won to KT in network fees, but not to SK Broadband and LG UPlus. Facebook rebutted, saying it was not intentional and this is why the company is taking legal action.

The spat triggered a controversy over the fairness of Korean regulations, under which domestic internet firms like Naver pay network usage fees proportionate to the scale of their services. Foreign players, however, do not go by identical standards.

The upcoming court’s ruling is likely to have an impact on other negotiations between local internet service providers and traffic-heavy content providers such as Netflix and YouTube. Netflix is currently negotiating with local ISPs.

By Park Ga-young (gypark@heraldcorp.com)