Google's Unpaid Network Fees in South Korea: A Case of 'Free-Riding'?
Google's potential avoidance of network usage fees in South Korea has sparked a debate about the 'free-riding' of global tech giants on the nation's internet infrastructure. According to a Korean lawmaker, Google may have evaded up to 347.9 billion won ($244 million) in fees in 2024.
The controversy revolves around the fair contribution of large foreign content providers. Representative Choi Soo-jin of the main opposition People Power Party argues that Google's unpaid fees could range from 214.7 billion won to 347.9 billion won, based on its estimated share of South Korea's internet traffic.
The lower-bound figure is calculated using the network fee ratios of local platforms Naver and Kakao, while the higher estimate reflects Google's presumed dominance in the market. Choi emphasizes the importance of market fairness, stating that Google's 'free benefits' are a result of its overwhelming market dominance.
The estimate of 214.7 billion won is derived from Naver's 1.8% and Kakao's 2% payment ratios in 2016, applied to Google Korea's projected 2024 revenue of 11.3 trillion won. The higher estimate of 347.9 billion won is based on Google's presumed 31.2% share of the nation's internet traffic, with the total value of the dedicated internet line market in 2024 estimated at 1.12 trillion won.
Choi calls for the passage of the 'network free-rider prevention act' to ensure fair contributions from foreign content providers. She also urges the government to mediate network usage negotiations between global tech firms and domestic telecom operators, addressing structural reverse discrimination against Korean ICT companies.
Google and other foreign platforms oppose mandatory network fees, arguing against 'double billing' and invoking net neutrality principles. However, the debate continues, with questions about the fair distribution of costs and benefits in the digital economy.
