Google Officializes In-App Payments... Can the Han Government Stop It?

Bills to Forcefully Block Payment Methods Proposed One After Another
Decision on Overseas Monopoly Operators
Effectiveness of Korean Government's Administrative Power Uncertain

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] Google’s official stance to enforce in-app payments and a 30% commission fee is expected to cause significant repercussions. Although the National Assembly has introduced numerous bills to fundamentally ban mandatory in-app payments, it remains uncertain whether our government’s administrative power can effectively influence foreign operators.

According to the National Assembly on the 29th, immediately after Google announced the mandatory in-app payment and commission rate increase, the Assembly consecutively proposed bills to regulate these as prohibited acts.

In July, Representative Park Seong-jung of the People Power Party, in August, Representative Hong Jeong-min of the Democratic Party, and in September, Representative Jo Seung-rae of the Democratic Party each introduced related bills as main sponsors.

Representative Park’s bill includes provisions to newly establish in Article 50 (Prohibited Acts) Paragraph 1 of the Telecommunications Business Act the act of "an app market operator forcing a specific payment method or imposing unreasonable or discriminatory conditions or restrictions when mediating transactions of mobile content, etc."

Representative Hong’s bill stipulates the establishment of Article 22-9 (Duties of App Market Operators, etc.) to prohibit "an app market operator unfairly using its transactional position to impose disadvantageous contracts, as prescribed by Presidential Decree, on those who develop and provide mobile content, etc., on the app market."

Representative Jo’s bill also proposes the establishment of Article 22-9 (Duties of App Market Operators, etc.). Representative Jo detailed prohibited acts including "forcing a specific payment method on mobile content providers in the app market" and "removing mobile content, etc., from the app market."

However, even if these bills pass, it is uncertain whether they will be effective due to the limitations of our government’s administrative power over foreign operators. Foreign operators often evade laws or even resort to litigation despite existing regulations. The government plans to first examine whether the current prohibited acts under the Telecommunications Business Act can address Google’s enforcement of in-app payments.

Earlier, Han Sang-hyuk, Chairman of the Korea Communications Commission, stated at the Science, Technology, Broadcasting and Communications Committee meeting held at the National Assembly earlier this month, "We consider Google’s enforcement of in-app payments to fall under the ‘provision of telecommunication services that harm users’ interests’ as defined in the Enforcement Decree of the Telecommunications Business Act, but we are reviewing this as there may be conflicts with other regulations."