Content Value Conflict Leads to Legal Battle... CJ ENM Sues LG Uplus

[Asia Economy Reporter Joselgina] The conflict between CJ ENM and LG Uplus over content usage fees is ultimately leading to a legal battle.

According to the industry on the 16th, CJ ENM filed a complaint last week at the Seoul Central District Court claiming that LG Uplus infringed on its copyrights by unauthorizedly providing its content for over 10 years. This is the first time a content provider (CP) and a domestic telecom company have gone to court over content usage fees.

CJ ENM took issue with LG Uplus’s policy of linking multiple set-top box services operated from 2009 to 2019. In the early days of IPTV service, LG Uplus allowed customers using multiple set-top boxes in one household to watch paid VOD on one set-top box and view it for free on other set-top boxes.

CJ ENM stated, "LG Uplus has long provided our VOD and paid channel services free of charge to multiple set-top box users without permission," adding, "Unauthorized use of content should not be tolerated for the development of the cultural content industry, and we hope this lawsuit will serve as an opportunity to recognize content copyrights."

CJ ENM views LG Uplus as having freely used paid content without consultation with CPs to expand IPTV subscribers. At that time, other IPTV providers such as KT and SK Broadband specified the number of set-top boxes per household in contracts and shared additional revenue with CPs.

In response to concerns raised in 2018 by CJ ENM and others including terrestrial broadcasters and comprehensive programming channels, LG Uplus abolished the related policy the following year. LG Uplus has maintained that since no additional fees were charged and no revenue was generated, there is no basis for additional settlement with CPs.

Inside and outside the industry, this lawsuit is seen as CJ ENM exerting all-around pressure on the telecom industry by bringing up past cases. The decision to set the lawsuit amount at an unavoidable 500 million won is also evaluated as placing weight on the 'symbolic meaning' of having content copyright infringement recognized.

Currently, CJ ENM and the telecom industry have been in conflict for several months over content usage fees for IPTV, OTT, and other platforms. In negotiations over IPTV program usage fees, CJ ENM demands a 25% increase, while the three IPTV providers (KT, LG Uplus, SK Broadband) maintain an unacceptable stance.

In June, real-time broadcasting of 10 CJ ENM channels including tvN and Mnet, which were provided on LG Uplus’s mobile TV application ‘U+ Mobile TV,’ was cut off. The two sides have also failed to find common ground over the ‘mobile IPTV’ service that allows IPTV viewing on portable devices such as tablet PCs.