Twitch hit with a $315k fine for cutting services in South Korea

Back in December, Twitch announced it would cease operations in South Korea Feb. 27, blaming what CEO Dan Clancy called “prohibitively expensive” operational costs.

Now, just days before Twitch’s exit, it’s been hit with a 420 million won (~$315,000) fine from the Korea Communications Commission (KCC) for suspending its VOD service in 2022.

The VOD service suspension was an early attempt from Twitch to cut operational costs. It lowered the overall video quality available in South Korea from 1080p to 720p in September 2022, then removed the ability for viewers to replay streamers’ VODs altogether that December. It later removed the ability to for South Korean streamers to create VODs of their own content.

According to The Korea Times, the KCC determined that Twitch ending the VOD service “violated the local telecommunications business law byb undermining the interests of users.”

The commission reportedly asked Twitch for data to verify why it would need to lower video quality for VODs and streams, but Twitch refused the request, citing confidentiality. Twitch argued that suspending VODs was a necessary move to continue operating in South Korea, though now it’s apparent even suspending VODs did not improve operational margins enough for Twitch’s liking.

In addition to the 420 million won VOD fine, the KCC imposed a 15 million won fine (~$11,000) for “its failure to implement a system to prevent the distribution of illegal footage,” per Korea Times. It’s not clear exactly what “illegal footage” the commission is referring to.

The commission has also ordered Twitch to implement preventative measures for VODs being terminated again should it ever resume operating in South Korea.

And, on top of all that, the KCC has reportedly told Twitch to prepare user protections, including refunds, ahead of its Feb. 27 exit.

Twitch leaving South Korea will, of course, significantly impact South Korean streamers who have built their careers on the platform. Its December announcement prompted anxiety from streamers who realized they now only had two options for continuing to stream: move to a different platform, or move to a different country.