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Kim & Chang Secures Victory in Facebook’s Appeal of Korea Communications Commission’s Fine and Corrective Order in Landmark Case Relating to Change in Connection Routes

2019.08.22

In a case that has been described as “the trial of the century,” Kim & Chang represented Facebook in its appeal of a Korea Communications Commission’s (“KCC”) administrative fine and corrective order, and successfully obtained a favorable decision from the first trial court.

In imposing the fine and corrective order (the “Disposition”), the KCC alleged that Facebook’s act of partially changing its connection routes was an “act that restricts the use of telecommunications services in a manner that substantially undermines telecommunications users’ interests,” prohibited under Article 50 of the Telecommunications Business Act (“TBA”). 

Facebook appealed the Disposition, in support of which Kim & Chang organized an expert team composed of the Technology, Media & Telecommunications Practice, the Litigation Practice, and patent attorneys specialized in the communication services sector.  Based on a thorough understanding of the relevant regulations and an in-depth analysis of precedents and technical data, Kim & Chang asserted the following key arguments: (i) Content Providers (“CP”), such as Facebook, should not be responsible for the quality of internet services, because unlike Internet Service Providers (“ISPs”), CPs are unable to manage and control the quality of internet services; (ii) Facebook’s act of changing the connection routes in this case does not constitute “restriction” of the use of services (a required element under the TBA); and (iii) Facebook’s act of changing the connection routes in this case did not substantially undermine user interests (also a required element under the TBA). 

Accepting substantially all of these arguments, the Fifth Administrative Division of the Seoul Administrative Court revoked the Disposition in its entirety and ruled in Facebook’s favor. 

This ruling is expected to greatly affect the industry, as it affirms that CPs cannot be held liable for the quality of internet services, which they do not manage or control.

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