Korea fines Twitch $327k for suspending service (opens in new tab)

It's not just Korea that Twitch isn't profitable in; the company as a whole is not profitable.

Considering the high payouts to streamers, the lack of benefits for premium members, the long streaming hours of games which incurs server costs and makes it difficult to display ads, I don't think their business model is sustainable in the long run.

> Twitch Interactive, the operator of the service, reduced video quality in Korea from 1080p to 720p in September 2022 and terminated its VOD service five months later.

> The Korea Telecommunications Commission (KCC) determined the suspension of the VOD service violated the local telecommunications business law by undermining the interests of users.

> The commission has requested relevant data to examine whether Twitch had a justifiable reason for limiting the maximum viewing quality, but Twitch turned down the request, citing contractual confidentiality obligations.

I wonder what the relevant law says. Forcing a non-essential website to host and stream video content feels strange to say the least, especially given that streaming software like OBS can easily record the video locally to be uploaded to YouTube, AfreecaTV or whatever.

If it's deemed essential then the ISPs shouldn't be able to extort and extract profits from both sides of the pipe.

Also wonder why Twitch didn't provide the numbers given that they have already publicly said that the costs are high.

Ok, I'm just trying to understand this: Korea passed a law that increased operating costs for twitch (and similar entities, twitch is just the relevant case here). Twitch responded by reducing those costs by reducing the resolution, which seems reasonable. Then they were told they couldn't do that, so they've decided to simply cease operating in Korea as it would be even more expensive (presumably to the extent that they believed there was no possible path to ever being profitable).

And now they're being told that they will be fined for not operating in Korea at all?

Is that correct?

The logical equivalence would be a government passing a law that said "Farmers must pay trucking companies more than the maximum profit on an apple, for every apple they ship, even though the trucking companies are already being paid by the recipient of the apples. Not only are you not allowed to ship fewer apples, you also can't decide to stop being an apple farmer." (I'm not sure if the Korean law also prevents twitch/apple farmers from increasing prices to cover the cost of those fees, but that would track the rest of the nonsense)

If they're exiting anyway, what happens if Twitch just doesn't pay the fine?

Korea has afaik much higher cost to deliver data for international services because they charge the sender of the data per unit, and Twitch couldn’t operate profitably despite the obvious market fit.

Surprising that they’re fining them on top of it though!

There is a competitor to Twitch that's specific to Korea called AfreecaTV (in my personal opinion it's objectively a much better platform than Twitch). I'm pretty ignorant about the details of the internal political landscape in Korea, but I wonder if Afreeca's ownership might have some ties to the Korean government that would encourage the Korean government to make plays that hinder Twitch's operations there in order to increase Afreeca's market share.

I think every private company like Google/ Meta/ Cloudflare should stop provide their service to Korea. Always support the right thing. They shouldn't be charging extremely high charge for bandwidth.

Cost of doing business

Trying to squeeze the last bit of money they can before Twitch is gone for good.

They will no doubt pay more in human hours dealing with this fine than the fine itself. Calling it a slap is a stretch

Considering most Internet Giant has very little leverage in SK; Google, Bing, Facebook, Amazon etc have very little market shares. There is very little to push or lobby for better Korean International Internet connection. The whole sender pays thing, is AFAIK not a thing in any other developed country. ( And absolutely ridiculous )

I guess that is the Korean government wants all the internet company not from Korea to pulled out of Korea?

This blog has a good bit of background on the Korean "sender pays" regulation scheme

https://www.internetsociety.org/blog/2022/09/sender-pays-wha...

> The story of South Korea’s settlement regime starts with one such cache offered by Facebook. Through peering arrangements amongst the largest ISPs (KT, SK Broadband, and LG Uplus), it enabled content that had previously been accessed over expensive transit links to Facebook’s server in, for example, Hong Kong, to now be accessed from Facebook’s cache in KTs network

> But in 2016 the Korean government implemented a set of amendments to its 2005 interconnection policy that fundamentally altered norms of voluntary negotiated interconnection by instead imposing a “sending party pays” regime. The critical piece of this change was to impose a “mutual settlement” requirement amongst same-tier operators, in which ISPs were required to compensate each other for traffic exchanged between them. Not long after, KT found themselves with large bills from the other two Tier-1 ISPs, asking for payment for the Facebook traffic that was sent from the cache in KTs network

> Faced with these claims for payment, now mandated under the new interconnection rules, KT sought to recoup these costs by instead charging Facebook for the traffic delivered from the cache. When negotiations between KT and Facebook failed, Facebook decided to disable its cache in KTs network, which meant that Korean users were instead routed to other caches overseas

> Due to this deteriorated service quality for connections to Facebook, KT made a claim to the regulator KCC that issued a fine against Facebook of USD $328,000 for deliberately disrupting its services

> While the story of Korea’s settlement regime is tied to the presence of large international content providers, it has been the domestic content providers that have borne the brunt of the impact. The 2016 rules that imposed a sender pays regime meant that hosting content in any of Korea’s networks became excessively expensive as the ISP would pass on costs to the content provider. While Facebook could simply disable its cache and route the traffic abroad when KT requested “network usage fees”, local content providers could not

This really seems like the Korean telecoms watchdog wanting to both keep its cake, and eat it at the same time.

aka "We'll gouge Twitch for all their worth", followed by "How DARE they close up shop after we gouged them?"

And if Twitch don't comply, Korea is going to...suspend them...oh wait.

That is a salty move

What will they do if Twitch doesn't pay the fine?

Suspend twitch? Oh wait