Facebook strikes deal with SK to pay data fees

Facebook reportedly finally agreed to pay data traffic fees to SK Broadband after two years of negotiations.

According to local media reports Sunday, the social media giant and internet provider agreed to a two-year network usage deal to set up a cache server for temporary data storage and provide fast Facebook access to SK Broadband users. While the two companies did not confirm the exact sum, Facebook will reportedly pay more than what it previously proposed during negotiations.

SK Broadband is not the first internet provider that Facebook will be paying in the country. In 2015, it signed a contract with KT to open a cache server. The two companies are currently working on renewing the contract after it expired last July.

The new deal with SK Broadband comes after Facebook faced negative press for inconveniencing users while trying to avoid paying network fees to SK Broadband and LG U+.

In late 2016 and early 2017, the social media giant re-routed non-KT users to its server in Hong Kong when they tried to connect to the platform, slowing down access considerably. The Korea Communications Commission charged the company 396 million won ($353,900) in fines and ordered it to change its practices.

Following the agreement with SK Broadband, the social media giant is expected to open up a cache server with the internet provider.

The company is also reported to be working with LG U+ on a similar deal.

The recent deal highlights the question of whether other foreign IT giants will follow suit and pay data traffic fees to Korea’s network providers.

Many Korean businesses have complained that current laws and practices hurt domestic firms. Naver and Kakao, for example, pay around 70 billion won and 30 billion won every year to Korea’s three network providers to compensate for their high traffic volume, while Google and Netflix - which are thought to be responsible for half of Korea’s data traffic together with Facebook - pay none.

BY KIM EUN-JIN AND PARK TAE-HEE [kim.eunjin1@joongang.co.kr]