Google reportedly avoided network fees of up to 347.9 billion won last year. On the 13th, Choi Su-jin, a member of the National Assembly’s Science, ICT, Broadcasting and Communications Committee from the People Power Party, argued that based on her analysis of the electronic disclosure system (DART), the Korea Information Society Development Institute (KISDI) reports, and media reports, Google should have borne network fees estimated at 214.7 billion won based on revenue and 347.9 billion won based on traffic share.
The fee estimation based on revenue considered that domestic platform giants Naver and Kakao paid network fees equivalent to 1.8% and 2.0% of their revenue in 2016, respectively. By applying the estimated revenue for Google Korea last year (11.302 trillion won) calculated by Professor Junsung Min of Gachon University, it was estimated that Google should have paid approximately 214.7 billion won in fees.
Choi further explained that according to KISDI’s “Telecommunications Market Competition Assessment Report,” the size of the domestic dedicated internet line market was 1.115 trillion won last year. If calculating based on traffic share (31.2%), Google should have borne network fees of 347.9 billion won.
She emphasized, “Despite the rational market order requiring payment for network use, Google is exploiting its dominant global market power to avoid paying and enjoys over 200 billion to 300 billion won annually as a ‘free benefit,’ which is a typical example of market failure.”
She added that in order to address the issue of reverse discrimination against domestic ICT companies, passing the “Network Free Ride Prevention Act” and active government arbitration in the negotiation process of network usage contracts between companies are essential.
Meanwhile, Google and other foreign big tech companies argue that paying additional network fees when users already pay internet access fees to telecom companies is double charging. They claim that, according to the principle of “net neutrality,” services should not be differentiated or charged extra based on the volume of traffic.