S.Korea minister nominee opposes "problems" from network fee push on Google, Netflix

SEOUL, May 3 (Reuters) - A South Korean ministerial nominee said on Tuesday he would try to prevent problems arising from a legislative push to make such global content providers as Netflix and Alphabet’s Google pay local network fees.

Lee Jong-ho, nominated to become minister of science and of information and communication technology, did not, however, say what exactly he would do nor whether he would prevent the companies being charged for network usage arising from their services.

Lawmakers have introduced legislation, which is still at an early stage, that would impose “a fair price” on the companies.

“Global firms are not paying network usage fees,” said lawmaker Jun Hye-sook during a parliamentary hearing on Tuesday. “Local firms are paying fees despite generating a fraction of the traffic that global firms are.”

Netflix is in court against local internet service provider (ISP) SK Broadband, which is already trying to collect such fees. On Tuesday Netflix referred Reuters to comments it had made in March, when it said it would keep providing its service during the litigation.

Google had no immediate comment, but its YouTube unit said last month the proposed legislation would give ISPs double payment: once by customers and a second time by video platform companies. YouTube would incur “huge” costs and the Korean creator community would be affected, it said.

Lee was cautious in statements at the parliamentary hearing. He would comprehensively review the matter, he said, adding he would try to prevent problems arising in relation to it.

According to government figures, Google generates 27.1% of South Korea’s total internet traffic, Netflix 7.2%, Meta Platforms 3.5% and South Korea’s dominant portal operator, Naver, only 2.1%.

Naver and other local content providers pay fees, SK Broadband said, although it did not say how much.

The Seoul High Court will this month hold the next hearing of an appeal by Netflix in the case with SK Broadband, court records showed. A lower court ruled last year that Netflix should “reasonably” give something in return for network usage. (Reporting by Joyce Lee; Additional reporting by Heekyong Yang; Editing by Bradley Perrett)