[Google, be evil] The Skeleton of the 'Google Gapjil Prevention Act' Emerges... Concerns Over It Becoming a Half-Measure

[Asia Economy Reporter Seulgina Jo] The so-called 'Google Gapjil Prevention Act (Amendment to the Telecommunications Business Act),' which was promoted in response to Google's commission fee increase as the king of the application ecosystem, has revealed its framework. The amendment proposed by Park Seong-jung of the People Power Party, which prohibits the forced use of specific payment methods, and the amendment by Cho Seung-rae of the Democratic Party, which grants the Korea Communications Commission the authority to investigate and request data submission, are the main pillars.

However, concerns are mounting that the bill may end up as a 'half-baked law' as it is being promoted mainly as an ex-post regulation. There are calls for policy support to activate domestic platforms and protective measures for the domestic ecosystem to prevent becoming a subcontracting base for K-content production.

Discussion on Integrated Bill... Likely to Hold 2nd Subcommittee Meeting Next Week

According to the Science, Technology, Information and Broadcasting and Communications Committee (STIBC) of the National Assembly on the 15th, the task force (TF) composed of party secretaries and expert committee members is busy finalizing a bipartisan integrated bill centered on the currently proposed app market-related bills. An STIBC official said, "The integrated bill is a plan to add Democratic Party member Hong Jeong-min's bill to the bills by Park and Cho."

The 2nd Subcommittee on Information and Communications Broadcasting Bill Review (2nd Subcommittee) is likely to be held on the 21st during the current National Assembly audit period. Park, the People Power Party secretary of STIBC and chairman of the 2nd Subcommittee, said, "The date for the 2nd Subcommittee meeting has not been finalized yet," but added, "The framework of the (Google Gapjil Prevention Act) has been decided." Earlier, Google sparked controversy by deciding to enforce the use of Google's own payment method (in-app payment) for app developers listed on Google Play to sell content and items starting next year, taking a whopping 30% commission in the process.

The framework of the integrated bill, based on Park's proposal, defines the forced use of specific payment methods by app market operators and the imposition of discriminatory conditions or restrictions as prohibited acts. Cho's proposal prohibits app market operators from ▲forcing specific payment methods ▲unjustifiably delaying reviews or deleting content ▲inducing mobile content providers not to supply to other app markets. It also strengthens the authorities' management and supervision powers by allowing the Korea Communications Commission to investigate related facts or order app market operators to submit data.

Additionally, the bill proposed by Hong, which is under discussion, is similar to Cho's. It prohibits developers from entering into contracts unfavorable to them and forbids app market operators from using their market dominance to prevent fair competition among developers.

"Insufficient to Prevent Fundamental Gapjil" Criticism Also Raised

However, criticism has emerged that the currently discussed integrated bill focuses on immediate issues such as Google's forced in-app payment. Considering Google's recent actions as an 'anti-ecosystem move' aimed at subordinating app operators and users by leveraging its 70% domestic market share, it is pointed out that the bill is insufficient to solve fundamental problems.

Professor Kwak Kyu-tae of Soonchunhyang University said, "There is concern that domestic discussions and legislative efforts are excessively focused on the 'commission rate.' It is more important that there is no platform in the domestic market to counter Google when it excessively raises commission rates," he pointed out. An industry insider also said, "If the focus is only on payment policies, controversies over second or third app tolls could recur anytime," questioning, "Will the law be amended every time that happens?"

Google's unfair practices controversy, despite its founding motto "Don't Be Evil," is not new. In recent years, the domestic gaming industry has repeatedly raised concerns that Google, which virtually dominates the app market, imposes implicit sanctions by limiting first-page (featured) exposure when developers list apps simultaneously on Google Play and domestic app markets. Kim Jae-hwan, head of policy at the Internet Enterprise Association, said, "For fair trade laws to apply, there must be actual reports or complaints, but since no official reports have been filed, it is not easy to resolve," describing the atmosphere where developers in a subordinate position have no choice but to watch Google's moves. The Korea Fair Trade Commission received zero reports of exclusionary acts against competing businesses last year.

It means that proper competition is impossible with market power alone. Professor Moon Seong-bae of Kookmin University, who recently attended a related forum, expressed concern, saying, "Because Google and Apple take all consumer purchase information, they can limit potential developers' market entry by launching similar apps or services," adding, "IT and content innovation could also be hindered."

Focus Should Be on Restoring Competition... Ecosystem Protection Measures Also Needed

Accordingly, voices emphasizing the need to focus more on 'restoring market competition' are gaining strength. There are claims that, alongside policy-driven nurturing of domestic platforms, legal measures imposing certain obligations to protect the domestic industry, similar to the 'screen quota system,' should be temporarily introduced.

Earlier, Lee Jae-hwan, CEO of One Store, who appeared at the National Assembly audit, suggested, "There should be two measures together: punishing the abuse of power by dominant market operators and enabling content companies to release through domestic app markets without hesitation."

The 'content equal access right' included in Democratic Party member Han Jun-ho's bill is also in a similar vein. It proposes applying the measure introduced at the launch of IPTV to create fair competition conditions for new operators in the broadcasting market to the app market as well.

Han's office explained, "When a mobile content provider supplies content to a specific app market operator, it should also provide it to other operators without discrimination," adding, "The focus is on market competition." Just as guaranteeing content equal access in the broadcasting market induced market competition and led to user benefits, it is interpreted that the same effect is expected in the app market.

However, there are also calls for cautious review, as such preemptive regulations could end up hindering domestic companies. Professor Kwak said, "It is risky to try to block (Google's gapjil) with a single provision," but added, "Operators should be allowed to upload (content) to multiple platforms. Policy support to activate domestic platforms is urgently needed."