[Reverse Discrimination Caused by Regulation] The World Is Watching Google and Apple Tax Lawsuits... Eyes on Europe

Amid Expectations of App Operator Victory, Korean Companies Also Watching Closely

[Image source=Yonhap News]

[Asia Economy Reporter Cha Min-young] "We reject the rules made by Apple."

The conflict between platform companies and developers over the 30% application fee, commonly called the 'Google Tax' or 'Apple Tax,' has escalated into a global lawsuit. In the United States, there are even moves to legislate antitrust laws to prohibit app market monopolies.

In the United States, the home of Google and Apple, last year the conflict turned into a lawsuit when Apple removed the game company Epic Games from the App Store after it built a separate payment system in protest against Apple's commission policy. Epic Games formed the 'Coalition for App Fairness (CAF)' in alliance with other major app companies. Well-known developers such as Spotify, Basecamp, Match Group, Tinder, and Hinge took the lead in emphasizing 'app fairness' and advocated to "protect the App Economy."

Discussions are also underway in state legislatures across the U.S. The day before, the North Dakota State Senate rejected an app market antitrust bill, siding with Google and Apple instead of Epic Games. Similar bills are being discussed in Georgia, Arizona, Massachusetts, Minnesota, Wisconsin, and other states. This is similar to the Google abuse prevention law (amendment to the Telecommunications Business Act) being promoted domestically. Last year, the U.S. House Judiciary Committee’s antitrust subcommittee released a report estimating that Apple and Google earned $33 billion (approximately 36.26 trillion KRW) last year from app market fees alone.

In Europe, the music streaming service Spotify filed an antitrust lawsuit against Apple in March 2019 and officially raised the issue with the European Commission (EC). Spotify criticized, "The Apple Tax of up to 30% is problematic," and accused Apple of "interfering with business by imposing rules that make it difficult for users to receive discounts."

This is expected to have a significant impact on lawsuits in other countries, including Korea. Considering the European region’s characteristic of imposing strong sanctions on anticompetitive practices that hinder fair competition, there is optimism about the likelihood of app operators winning. Domestically, a group of 14 co-lawyers including Attorney Jeong Jong-chae of the law firm Jeongbak reported Google to the Fair Trade Commission through the joint litigation platform 'Hwanan Saramdeul' (Angry People).