Google Under Pressure... Facing Setbacks Including Controversy Over Sea of Japan Name

[Asia Economy Reporter Bu Aeri] The conflict over Google's 30% commission and mandatory in-app payment policy is deepening. Domestic app operators have announced plans to report Google to the Fair Trade Commission.

Google Under Pressure

According to industry sources on the 23rd, the joint legal team including the collective lawsuit legal platform 'Hwanan Saramdeul' and attorney Jeong Jong-chae of Jeongbak Law Firm will submit a complaint to the Fair Trade Commission on the 24th on behalf of app operators harmed by Google's in-app payment policy.

They claimed, "Google is transferring its dominance in the operating system (OS) and app market to the in-app payment service market, forcing in-app payments and imposing an unbearable monopoly price of 30%." They also argued that the high commission fees are directly passed on to consumers.

They had planned to report Apple as well, but decided to monitor the situation after Apple announced it would reduce app commissions for small and medium developers from the existing 30% to 15%.

Within the industry, strategies to pressure Google through 'figures' are also ongoing.

Professor Yoo Byung-jun of Seoul National University's Business Administration Department announced at a forum hosted by the Korea Internet Corporations Association on the 20th that Google's app commission expansion policy is expected to cause a 2.1127 trillion KRW annual revenue decrease in the content industry in 2021.

Considering Apple's App Store, which already applies a 30% commission, the revenue loss in the 'mobile content industry' due to app market commissions is estimated to reach approximately 3.5838 trillion KRW. Professor Yoo calculated this based on the transaction amount (9.2726 trillion KRW) to which the app commission expansion applies. Considering the content industry's annual growth rate of 10.3%, he estimated that by 2025, the revenue loss would reach 5.3625 trillion KRW.

Additionally, the industry ripple effect is expected to result in a production decrease of 2.9408 trillion KRW and the loss of 18,220 jobs. Professor Yoo stated, "Considering that many young people are employed in the content business, this is expected to have a negative impact on the youth."

Photo by Yonhap News

To Make Matters Worse, 'Sea of Japan' Label Controversy Adds Fuel

To make matters worse, the controversy over the labeling of the Sea of Japan has further worsened domestic public opinion against Google. Recently, Google used the expression "Sea of Japan (also known as East Sea)" when displaying the East Sea in its weather service, drawing criticism from domestic users. Protests against Google poured in on social networking services (SNS) such as Twitter. In response, Google stated that it is internally verifying the facts.

There is speculation that Google, placed in a difficult position, will eventually follow Apple's footsteps. An industry insider said, "The public pressure on Google will be considerable," adding, "Google, which had justified its policies by following the precedent set by the leading app market operator (Apple), is now losing its rationale, making it difficult to continue pushing its policies."