Google’s Internet Traffic Share in Korea Hits Record 31%, Fees Unpaid

The debate over network usage fees has reignited as Google’s share of internet traffic in Korea has exceeded 31%, marking a new record high for the second consecutive year. Despite placing the heaviest traffic burden on Korean networks, Google continues to avoid paying network usage fees, amounting to hundreds of billions of won. While a response from the government and industry is urgently needed, concerns over trade friction with the United States, the prolonged political vacuum, and the recent hacking incident affecting SK Telecom, the leading telecom provider, have hampered efforts to address Google’s “network free-riding,” which is expected to persist.

According to a report on the daily average traffic of major value-added telecommunications businesses in 2024, which was submitted by the Ministry of Science and ICT to Rep. Lee Hae-min of the Innovation Party on May 7, Google’s domestic traffic share reached 31.17% at the end of last year. This marks a steady increase from 27.1% in 2021, 28.6% in 2022, and 30.55% in 2023, setting a new record high. This figure significantly surpasses competitors such as Netflix (4.88%), Meta (4.39%), Naver (4.86%), and Kakao (1.26%).

Traffic refers to the volume of data exchanged over a network. Higher traffic volumes lead to increased investment burdens for telecom companies in network operation and expansion. With the rapid growth of video streaming services, traffic has surged, prompting telecom companies to demand that content providers (CPs) like Google and Netflix, the “source of the problem,” share the burden of additional network investments. Considering that Naver and Kakao pay hundreds of billions of won annually, Google’s unpaid fees are estimated to be in the hundreds of billions of won, and including other foreign CPs, the total amount could reach trillions of won annually.

CPs argue against these fees, claiming that telecom companies already receive fees from subscribers and that imposing network usage fees violates the principle of net neutrality, which mandates equal treatment of all data on the internet. However, telecom companies reject this argument, citing network usage fee payment agreements and court rulings in countries like France and Germany. In Korea, a 2021 court ruling in a lawsuit between SK Broadband and Netflix affirmed Netflix’s obligation to pay network usage fees. A telecom industry official stated, “Telecom companies are solely bearing the burden of the annually increasing traffic, primarily driven by video content. If we fail to secure sufficient investment capacity to match the traffic growth, it could lead to quality degradation and consumer harm.”

Experts believe government intervention is crucial as the conflict is expected to intensify with increasing traffic. Network usage fees are determined through negotiations between businesses, but domestic telecom companies lack bargaining power, making negotiations difficult. Prof. Shin Min-soo of Hanyang University’s Department of Business Administration said, “Unlike global telecom companies like Deutsche Telekom, domestic telecom companies, being regional players, struggle even to get a seat at the negotiating table. A supporting system, similar to Australia’s News Media Bargaining Code, is needed to facilitate private negotiations.” Prof. Choi Kyung-jin of Gachon University’s Law School added, “Demanding network usage fees is based on basic market principles. However, Korea is in a unique situation where market principles don’t apply, necessitating institutional measures.” The European Union is also pursuing legislation, the Digital Network Act (DNA), to mediate network usage fee negotiations.

However, government intervention is unlikely in the near future. The political vacuum created by the presidential impeachment and snap election, coupled with the U.S. government’s recent labeling of Korea’s network usage fee regulations as a “digital trade barrier,” raises concerns that this issue could escalate into a trade dispute. While Rep. Lee and others have proposed related bills in the National Assembly, they remain pending, and the government maintains a neutral stance rather than actively mediating. Furthermore, SK Telecom is currently focused on addressing the recent hacking incident, pushing the network usage fee issue to the back burner.

In addition to the network usage fee controversy, Google faced criticism last year for paying only 24 billion won in corporate tax, sparking accusations of tax avoidance. The company also drew fire for demanding access to high-resolution map data from the Korean government. Rep. Lee emphasized, “The market balance has long been disrupted by the influence of global Big Tech. While the form and content of contracts should be left to market autonomy, minimal legal norms are necessary to prevent situations where companies refuse even to sit at the negotiating table.”