Kim & Chang achieved a significant victory for Meta Platforms Ireland Limited (formerly Facebook Ireland Limited, “Meta”) on December 21, 2023 when the Supreme Court revoked a corrective order and administrative fines imposed by the Korea Communications Commission (the “KCC”) in March 2018 (the “Dispositions”), regarding Meta’s change in connection routes. Major content providers (“CPs”) such as Meta often manage online traffic by adjusting their connection routes. Therefore, this decision will have wide-ranging ramifications for the industry, as a contrary finding would have significantly impeded CPs’ ability to manage their connection routes.
In this case, the KCC had alleged that Meta’s change in connection routes for its services had constituted an “act that restricts the use of telecommunications services in a manner that substantially undermines users’ interests,” which is prohibited under the Telecommunications Business Act (the “TBA”). To persuade the courts, we leveraged our deep understanding of both the underlying legal theories and the technical aspects underpinning internet connection systems, and the dynamics between CPs (such as Meta) and internet service providers.
Kim & Chang achieved victories at all three levels of administrative litigation (i.e., trial court, appellate court and Supreme Court). Further, the Supreme Court accepted our arguments in their entirety, unlike the appellate court, which had found that the client’s change in connection routes constituted an act of “restriction of use.”
The Supreme Court’s decision now sets forth meaningful guidance on CPs and their management of connection routes, with significant implications for the industry. In an unusual move, the Supreme Court issued a press release regarding its decision, highlighting the following principles:
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(i) |
Change in connection routes by CPs do not, in principle, constitute restriction of use prohibited by the TBA; |
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(ii) |
CPs are not liable for the quality of internet services not controlled and managed by them; and |
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(iii) |
Regulatory agencies cannot arbitrarily punish CPs without objective and empirical evidence. |
The matter involved complex technical issues concerning metrics to gauge internet quality, as well as the novel issue of whether CPs should be subject to regulations concerning internet quality. We employed innovative legal and factual arguments to advocate for Meta in previously-untested aspects of TBA enforcement, resulting in the Supreme Court accepting several major principles we set forth in our arguments.
Notably, the Supreme Court affirmed that (i) “substantial harm to user interests” must be measured according to internationally accepted standards, rather than using subjective metrics such as user complaints, and (ii) TBA concepts such as “restriction of use” and “substantiality” must be strictly interpreted.
