[2020 National Audit] Science and ICT Committee "Firm Action on Google In-App Payments... Will Draft Integrated Bill During Audit" (Comprehensive)

Lee Won-wook, Chairman of the Science, Technology, Information and Broadcasting Committee, is attending the National Assembly inspection of the Ministry of Science and ICT and presiding over the meeting held at the National Assembly on the 7th. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Seulgina Jo] The National Assembly's Science, Technology, Information and Broadcasting and Communications Committee (STIBC) has decided to take immediate action against Google, which has pushed through the '30% app commission' policy. During the national audit period, a task force (TF) will be formed centered on lawmakers who have proposed related bills, with the aim of creating a unified and coordinated committee alternative.

Cho Seung-rae, the ruling party's secretary of the STIBC and a member of the Democratic Party of Korea, stated on the afternoon of the 7th during the national audit, "It has been agreed that firm measures will be taken even during the audit regarding the forced in-app payment by global operators such as Google."

He added, "Currently, five lawmakers including myself, Park Sung-joong, Han Jun-ho, Hong Jeong-min, and Yang Jeong-sook have proposed bills, and we will form and operate a practical TF during the audit period to create a unified and coordinated committee alternative," emphasizing, "We also urge the Ministry of Science and ICT to actively participate in related discussions."

Cho mentioned, "The U.S. House Judiciary Committee's antitrust subcommittee released a 440-page report stating that the Big Four?Amazon, Google, Facebook, and Apple?abuse their monopolistic dominance in the market," referring to the related content. The report, released on the 6th (local time) after a 16-month investigation, includes content stating that Google and Facebook hold monopolistic power and require regulation and dismantling. Specifically, it also covers the issue of forced app commissions.

Cho said, "There may be various trade and other issues in regulating global operators, but since the analysis is like this even within the U.S., there is no need to be discouraged," and reiterated, "We urge the Ministry of Science and ICT to take an active and progressive stance."

During the audit, there was continued criticism of Google, which abuses its dominant position with a 70% market share in the domestic market by forcing specific payment methods and pushing through a 30% app commission.

Previously, Google announced that starting next year, app developers listed on Google Play will be required to use Google's payment method (in-app payment) when selling content and items, and Google will take a 30% commission in the process. Unlike the Apple App Store, this policy, which had been applied only to games, has been expanded to all content and apps.

As a result, not only will the burden on app developers increase, but it is also feared that consumers will inevitably face direct price hikes for content. For example, the price of one Naver Webtoon usage ticket (cookie) is 100 won on Google Play and 120 won on the Apple App Store. However, due to Google's commission policy change, starting next year, the prices consumers must pay for webtoons, music, e-books, and video subscription services are expected to rise to the level of the Apple App Store.

Democratic Party lawmaker Hong Jeong-min criticized, "Google's imposition of a 30% sales fee through in-app payments is an abuse of its position as a market dominator," adding, "It is an excessive level that startups cannot bear, causing consumer harm and destroying the app ecosystem." He stated, "In the internet content industry including startups, people are afraid to reveal their identities due to Google's dominant market position. They fear disadvantages," and argued, "The government should step in and regulate by applying the Fair Trade Act and the Telecommunications Business Act."

Democratic Party lawmaker Han Jun-ho also said, "Why wouldn't NCSoft appear as a witness? They are watching Google's moves," urging, "The government needs to act as a shield for our startups and companies so that they do not have to watch their steps."

Minister of Science and ICT Choi Ki-young responded to Hong's question on whether Google's recently announced support program worth 100 billion won to support Korea's digital content ecosystem is sufficient, saying, "No, I think not in the long run." He agreed with Hong's criticism that Google's support measures are merely 'showmanship.'

Regarding the claim that the National Assembly and government should adopt a resolution opposing Google's actions and take active measures, Minister Choi said, "It's not about targeting a specific company, but if there is unfairness, it should be improved so that innocent victims do not occur." He also stated that the ongoing fact-finding investigation by the Ministry of Science and ICT "has progressed considerably and is expected to be completed by the end of this month."