Highlights
- Twitch has been fined over $300,000 by South Korea for violating telecom laws, leading to termination of services in the country.
- The Korean Telecommunications Commission ruled Twitch’s stream quality reduction and VOD termination violated laws, resulting in a hefty fine.
- Twitch’s financial struggles continue as fines and refunds impact its bottom line, potentially requiring a major adjustment in its business model.
Streaming giant Twitch has been fined over $300,000 by the South Korean government for violations of federal law, as the platform prepares to terminate its services in the country. Twitch is ending service in South Korea on February 27, and this massive fine has once again raised eyebrows in response to the streaming service’s decision.
One of the most prominent streaming platforms across the globe, Twitch allows users to livestream a variety of content, store VODs, and interact through chats with emotes and more. While the platform has been popular in South Korea, Twitch recently made the decision to end service in the Asian country, though the process appears to be more tumultuous than the company had expected.
Twitch Might Be Getting More Expensive
Twitch subscriptions could be more expensive for users in the US soon, as the company begins to discuss pricing changes for select regions.
First reported by Korean outlet Yonhap News Agency, the Korean Telecommunications Commission (KCC) ruled that Twitch’s reduction of stream quality in 2022 and termination of VOD access for Korean users back in 2023 violated Korean telecom laws. As part of this ruling, the KCC has issued Twitch a fine of 435 million won, or $327,000, and is requiring Twitch to prepare to pay out refunds to affected users. The Korean law requires any independent telecommunications platforms to provide substantial evidence that reduced or terminated user services are a necessity to continue operations. However, Twitch declined the request for evidence to support its changes for Korean users, resulting in the ruling and fine. This fine comes in tandem with Twitch getting banned in Turkey for violations of more local laws.
Twitch Continues To Face Financial Woes
The KCC fine is yet another blow to Twitch’s financial struggles, which have been the subject of speculation over the past several months. It was recently revealed that Twitch may be raising prices in the US, as it is already increasing costs for users in other countries such as the UK, Australia, and Canada. Back in January, CEO Dan Clancy admitted that Twitch is not profitable, noting that the streaming service was heavily dependent on parent company Amazon to stay afloat. With major fines and ordered refunds likely to cut into Twitch’s bank account even further, many are questioning if the company needs to make a major adjustment to its current business model. For now, Twitch is working on its end of service hurdles in South Korea, with other problems continuing to pop up around the globe.
Major companies facing fines often pay their dues and quickly move on from the ordeal. However, Twitch’s persistent problems have resulted in loss of profits, furthering the streaming platform’s woes. As Twitch lays off hundreds of employees and faces fines in Korea, audiences continue to keep a skeptical eye on Twitch and its future.
