Ongoing Conflicts Between Platforms and Tenant Companies
Focus on Protocol Economy Pursuing 'Open Platforms'
Sharing Power and Resources Concentrated in Platforms with Users
Voluntary Industry Coexistence Is Key
[Asia Economy Reporter Minyoung Cha] "Fairer digital platform practices are needed for developers and consumers." Epic Games, the global game company that released the legendary video game 'Fortnite,' announced this on its homepage on the 17th of last month when filing an antitrust lawsuit against Apple. Epic Games, which opposed Apple's in-app payment fee policy charging up to 30% and built a separate payment system, was eventually removed from Apple's iOS platform last year, leading to a major legal battle. Epic Games is continuing lawsuits against Apple in the US and Europe in alliance with music streaming company Spotify and Match Group, the operator of the dating app 'Tinder.'
Recently, conflicts between platform companies and tenant companies have raised fundamental questions about 'coexistence' in the platform industry. This stems from the perception that it is difficult to solve the chronic problem of abuse of dominance over tenant companies in a 'winner-takes-all' platform industry structure where only top companies close to monopolies survive. In response, the 'protocol economy,' which pursues voluntary coexistence between platforms and companies, is gaining attention as an alternative.
According to related industries on the 14th, the protocol economy refers to an open economy where market participants create certain rules to participate. It creates rules that allow users to share the concentrated power and resources of the platform with users, striving to enable producers and transaction participants to share profits in a centralized platform trading environment. Recently, the Ministry of SMEs and Startups mentioned support policies for the protocol economy in the 'Top 10 Economic Policy Directions for 2021.'
One Store, which operates a domestic app market, lowered commissions to 20% for developers and to 10% for small businesses. It also granted the choice of payment systems. Developers can choose a separate payment system they want, not only One Store's in-app payment. If they use their own system, they only pay a 5% commission, reducing the burden on developers. Lee Jaehwan, CEO of One Store, emphasized, "We want to show that coexistence does not reduce company profits but contributes more significantly to the development of companies and industries."
Woowa Brothers, the operator of 'Baedal Minjok,' which faced controversy over commission policies for small business tenants, also announced coexistence policies signaling change. A representative example is the signing of a business agreement with the Ministry of SMEs and Startups and the Korea Federation of Small and Medium Business for 'Realizing the Protocol Economy through Win-Win Cooperation.' Platform data is provided to the public sector, and average sales, order information, and location information by region and industry are supplied to the small business commercial district information system. Customized marketing analysis information is provided free of charge to individual store owners, and a total of 50 billion KRW in win-win cooperation funds will be contributed.
Not only domestically but also overseas, the number of entities pursuing the protocol economy has increased. Uber, a ride-sharing service platform, acknowledged criticism that it insufficiently rewards its drivers for their contribution to revenue generation and expressed willingness to improve. Uber drivers can receive 15% of their annual compensation in Uber stock. This measure allows drivers to receive more rewards for their contribution to corporate growth.
Airbnb, which entered the US stock market last December, donated 9.2 million non-voting shares to the 'Host Donation Fund' for accommodation-sharing hosts during its initial public offering (IPO) process. Airbnb explained, "Both the company and hosts want to share success and distribute profits continuously, not just once." The fund will be invested long-term in the host community and used exclusively for hosts.
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