Breakdown of Science and ICT Committee Bill Subcommittee on 22nd
Google In-App Payment Mandate to Start in October
"Use Only Our Payment System" with 30% Commission
Legislative Hearing on Online Platform Act May Also Be Postponed in Two Days
[Asia Economy Reporter Cha Min-young] The so-called "Google Gapjil Prevention Act (Amendment to the Telecommunications Business Act)," a law aimed at preventing Google's in-app payment monopoly, is currently stalled due to partisan conflicts. As no agreement was reached between the ruling and opposition party floor leaders in the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee (STIBC), today's Information and Communications Broadcasting Bill Review Subcommittee (hereinafter Bill Subcommittee 2) also failed to convene.
According to the STIBC on the 22nd, the Bill Subcommittee 2, which was scheduled to be held at 10 a.m. that day, ultimately broke down. This marks the second consecutive week that the subcommittee has been canceled following the 17th. The legislative public hearing on the "Online Platform User Protection Act," proposed by Democratic Party lawmaker Jeon Hye-sook and scheduled for the full STIBC meeting on the 24th, is also likely to be postponed.
The trigger was the program "Kim Eo-jun's News Factory." The People Power Party has pointed out that TBS, operated with over 40 billion KRW of Seoul citizens' taxes, paid more than 2.3 billion KRW in appearance fees over five years to the host Kim Eo-jun without a contract, and has insisted that the Board of Audit and Inspection conduct an audit on TBS's budget execution. On the other hand, the ruling Democratic Party maintains a "no" stance, arguing that this issue is not suitable as a parliamentary agenda.
The day before, the floor leaders of both parties issued statements and engaged in a public verbal dispute. Democratic Party lawmaker Cho Seung-rae demanded the opposition side to hold a normal session, saying, "The Bill Subcommittee 2, chaired by the opposition floor leader, nullified the agreed agenda." In response, People Power Party lawmaker Park Seong-joong retorted, "Stop the parliamentary dictatorship protecting Kim Eo-jun."
The problem lies with the pending bills in the National Assembly. Starting this October, Google will expand the mandatory in-app payment policy on the Google Play Store to all digital content and impose a 30% commission fee. However, a 15% commission will be applied to businesses with annual sales below a certain threshold. This policy, previously applied only to games, has been extended to all content and apps, causing significant repercussions in the webtoon, web novel, and music industries.
Google faced heavy criticism after announcing it would charge a 30% commission regardless of sales volume across all industries. Despite Google's change in stance, the industry views it as a shallow "trick." It is estimated that payment commissions from domestic businesses with annual sales exceeding 1 million USD will amount to over 500 billion KRW annually.
The mandatory in-app payment system is also criticized as a move to monopolize users' payment information. Concerns have been raised that Google will monopolize payment information necessary for advertising and marketing linkage through the in-app payment system, thereby claiming ownership of the data. There have been numerous criticisms that Google is pressuring app developers by leveraging its 70% market share to maintain a monopolistic position.
Although related discussions are actively underway worldwide, including in the United States and Europe, there have been no cases where these have resulted in actual legislation. Korea is attracting attention as it could become the first case. In March, the Arizona House of Representatives, led by Representative Regina Cobb, passed a bill preventing Google and Apple from forcing app developers to use their own transaction methods (in-app payments), but the Arizona Senate later repealed the bill.
An official from the Internet Enterprise Association, a group of domestic tech companies, said, "The law must be passed before Google's in-app payment policy takes effect in October so that related regulations can be revised through enforcement ordinances and preparations can begin." He added, "Since the damage to app developers could be significant, prompt negotiations are necessary."
Meanwhile, the Online Platform User Protection Act, which was submitted on December 11 last year, is also an urgent issue within the STIBC, but the legislative public hearing scheduled for the 24th is also likely to be postponed. This is because the act, which aims to regulate platforms comprehensively by considering operators, user businesses, and end users?something difficult under the existing Telecommunications Business Act?is in legal conflict with the Fair Trade Commission's government proposal, the "Online Platform Intermediary Transaction Fairness Act," which has overlapping regulatory content. Although discussions on the related bills were planned for the public hearing on the 24th, it is expected to be delayed as the parties have not yet concluded consultations on witnesses.
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