Google Expands In-App Payment Fee Reduction Policy Worldwide

[Asia Economy Reporter Kang Nahum] Google has decided to expand the in-app payment commission reduction policy, which was announced in South Korea, to a global scale. Google expects that 99% of app developers worldwide will benefit from this.

Samir Samat, Vice President of Product Management for Android and Google Play, stated in a post on the global Android developer blog on the 17th, "Starting July 1, 2021, Google Play will reduce the commission on the first $1 million (approximately 1.1 billion KRW) in annual revenue from developers selling digital goods or services to 15%."

This means that the 15% commission reduction policy announced by Google domestically on the 15th will also be applied globally.

However, Google plans to apply a 30% commission on revenue exceeding that amount. For example, if a developer's annual revenue is 2 billion KRW, a 15% commission will be applied to 1.1 billion KRW, and a 30% commission will be applied to the excess 900 million KRW.

Nonetheless, Google predicts that 99% of developers worldwide who sell digital goods and services on Google Play will pay only half the commission.

Vice President Samat said, "Developers will be able to use the remaining half as essential investment funds for business growth, such as hiring additional engineers and marketing personnel and expanding server capacity."

Google's move is interpreted as a response to ongoing legislation targeting the monopolistic practices of app markets like Apple App Store and Google Play in countries including South Korea, the United States, and Europe.

In particular, South Korea currently has seven bills known as the 'Google Gapjil Prevention Laws,' including amendments to the Telecommunications Business Act, pending in the National Assembly. The Science, Technology, Information and Broadcasting Committee of the National Assembly plans to continue discussions on legislation against app market abuses despite Google's measures.

Jo Seung-rae, the Democratic Party's floor leader in the committee, said, "It is welcome that Google has made a decision to reduce the commission burden on businesses," adding, "I hope Google will also proactively accept fundamental institutional improvements to prevent tangible and intangible abuses of superior status." He emphasized, "Since both ruling and opposition parties agree on the need for fundamental institutional improvements and have proposed bills, we will continue legislative efforts."

The key issue lies with the opposition party, which has effectively put legislation on hold. A representative from the office of Park Sung-joong, the People Power Party's floor leader, said, "We are carefully examining the details and impact of Google's commission reduction decision," adding, "Once internal review is complete, we will express our position and proceed with follow-up measures."