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Photo = Yonhap news |
[Alpha Biz= Cha Hye Young] As traffic from global big tech companies continues to surge in South Korea, concerns are mounting over the issue of "free-riding," where these companies use the country’s internet infrastructure without paying for network costs. Experts warn that this could lead to a "tragedy of the commons" for the nation's internet networks.
Google, in particular, has come under fire as it accounts for a significant portion of South Korea's internet traffic but does not contribute to network usage fees. Experts estimate that the fair network usage fee Google should pay could reach 200 billion KRW annually.
This ongoing conflict between big tech companies and telecommunications firms is not only a local issue but a global phenomenon. Experts argue that the problem should be addressed through regulatory reform rather than through individual legal disputes.
Professor Byeon Sang-gyu of Hoseo University recently pointed out at a National Assembly forum, "As the traffic flowing into South Korea increases, telecom companies face additional costs such as international line fees and dedicated line expansion."
He further noted, "Even if global content providers build their own cache servers, if traffic from the domestic network continues to rise, the costs of network expansion, maintenance, and upgrades will also increase."
Professor Byeon also highlighted that internet traffic from big tech companies is on the rise, with video streaming services contributing significantly to increased traffic. He predicted that this trend would continue, with an increase in usage time for video services.
In fact, Google's daily traffic share in South Korea grew from 25.9% in 2020 to 30.6% in 2023, while Netflix and Meta also saw their shares rise from 4.8% to 6.9%, and from 3.2% to 5.1%, respectively, over the same period.
According to research from the Korean Association for Broadcasting, Professor Byeon estimates that Google should pay a network usage fee of about 200 billion KRW in South Korea. This amount is roughly 2% of Google's estimated 2022 revenue of 10.5 trillion KRW, which is similar to the size of the fees paid by local companies like Naver and Kakao.
Professor Byeon warned that "big tech companies’ free-riding on network costs encourages the consumption of the internet as if it were a public good, undermining socially acceptable levels of internet usage and, in the long term, causing the collapse of the ecosystem through a tragedy of the commons."
He emphasized that "it is urgent for the government to reform laws and regulations so that the issue of free-riding by global tech giants is not influenced by corporate conflicts or market dominance."
Alphabiz 차혜영 기자(kay33@alphabiz.co.kr)
