Naver, Kakao and Wavve all caught in 'Netflix Law' net

Korean IT firms Naver, Kakao and Wavve have been designated as content providers legally obliged to take responsibility for network stability, according to the Ministry of Science and ICT on Monday.

The three were named alongside Google, Netflix and Facebook as the six companies covered by a legal reform dubbed the “Netflix law” which went into effect last month.

Under the new reform, content providers that attract an average of more than 1 million users per day and account for more than 1 percent of Korea’s internet traffic are responsible for ensuring network stability. The six IT firms named all fulfill those conditions.

According to a ministry study conducted between October and December last year, Google users take up 25.9 percent of Korea’s internet traffic, followed by Netflix at 4.8 percent and Facebook at 3.2 percent.

Naver, Kakao and video streaming service Wavve, on the other hand, all created internet traffic taking up between 1 and 2 percent of the total.

The inclusion of domestic IT firms on the list is the realization of concerns raised by critics that question the law’s intentions. The legislation started out targeting multinational content providers which, unlike domestic IT firms, did not follow the local custom of paying internet service providers that invest in the country’s network infrastructure.

K-Internet, an advocate group for domestic IT firms, had argued in a December statement that the standard of designating IT firms affected was “murky,” as data suggested by internet providers can be “arbitrary” and “flawed."

The Ministry of Science and ICT will finalize the list of six in February after receiving feedback from the IT firms on whether its numbers are correct. A ministry official, however, said possibilities were slim that the feedback would create a change as big as erasing a name off the list.

Under the reformed Telecommunications Business Law, the six companies’ roles in maintaining network stability now includes the technical prevention of errors and warning internet service providers like telecom companies ahead of time when traffic is expected to be especially high.

“More specific guidelines will be set this year, following discussions with the private sector,” said the Ministry of Science and ICT in a Monday statement.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]