KCC Imposes 435 Million KRW Fine on Twitch for 'VOD Suspension'

Fines Imposed for Failure to Implement Measures Against Illegal Filming Distribution
No Violation of Quality Restrictions... but Network Fee Data Not Submitted
"Korean Business Ending, but Disposition Based on User Protection Principles"

The Korea Communications Commission (KCC) has imposed a fine of 435 million won on Twitch for suspending its VOD service.

On the 23rd, the KCC held a plenary meeting and made this decision. They also decided to impose an additional fine of 15 million won on Twitch for failing to implement technical measures to prevent the distribution of illegal filming materials.

The KCC conducted inspections and investigations to determine whether Twitch violated the Telecommunications Business Act by limiting viewing quality, suspending VOD services, and failing to implement technical measures to prevent the distribution of illegal filming materials.

On September 30, 2022, Twitch limited the maximum viewing quality of streaming channels from 1080p (FHD) to 720p (HD). On December 13 of the same year, it suspended VOD viewing services, and on February 7 of last year, it stopped VOD creation services.

The KCC found that the limitation on viewing quality did not constitute a legal violation, but viewed the suspension of VOD services as a prohibited act under the Telecommunications Business Act. The KCC began fact-finding investigations related to these two actions in August of last year.

Twitch argued that live streaming and VOD are merely service delivery methods or partial functions, and therefore cannot be considered acts that restrict or suspend the use of telecommunication services. They cited the lack of significant changes in user numbers due to the VOD suspension, the business decision to continue domestic services, and the absence of monetary damages to users as grounds for their position.

The KCC did not accept Twitch’s arguments. Lee Sang-in, Vice Chairman of the KCC, stated, "We judge that important matters were changed without justifiable reasons and that there is a significant detriment to user interests."

Additionally, the KCC conducted an on-site inspection in October 2022 regarding technical measures for comparison and identification to prevent the distribution of illegal filming materials, and found that Twitch did not implement the relevant measures. Although Twitch claimed to have made efforts using its own filtering and stream scanning technologies, this was also rejected.

[Image source=Yonhap News]

The KCC ordered Twitch to publicly announce the correction order on the first page of its online and mobile web for four days within one month and to submit a plan for implementing corrective measures within 10 days. Furthermore, with Twitch scheduled to terminate domestic services on the 27th, the KCC instructed that there should be no inconvenience to users during the refund process for paid goods and that streamers should be paid their final settlement amounts.

Meanwhile, the KCC pointed out that Twitch did not submit data on network usage fees requested to review the reasons for limiting the maximum viewing quality. Twitch cited confidentiality obligations under contracts with ISPs as the reason for not submitting the data.

Kim Hong-il, Chairman of the KCC, said, "Even foreign value-added telecommunication service providers with special circumstances terminating domestic operations must thoroughly protect users as subjects of the Telecommunications Business Act, and this principle guided the disposition."

Twitch decided to terminate its domestic service on the 27th, citing the high cost of network usage fees in Korea.