[Asia Economy Reporter Seulgina Jo] On the 15th, the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee will discuss the 'Google Gapjil Prevention Act (Amendment to the Telecommunications Business Act)' aimed at preventing Google's unilateral changes to its commission policy. The Google Gapjil Prevention Act, which was the biggest issue during last year's national audit, currently has seven bills pending. The core content prohibits abuse of market dominance, such as ▲forcing developers to use specific payment methods by app market operators or ▲inducing them not to register content on other app markets.
◆Google Gapjil Prevention Act Gains Momentum... Possible Passage This Month
According to the National Assembly's Science and Technology Committee on the 13th, the committee will hold the 2nd meeting of the Agenda Coordination Committee at 2 p.m. on the 15th to decide whether to submit the Google Gapjil Prevention Act to the plenary session. If more than two-thirds of the committee members approve the agenda referred to the Agenda Coordination Committee, it can be submitted to the plenary session. Currently, among the six members of the committee, Democratic Party lawmakers Jo Seung-rae, Jeong Pil-mo, Han Jun-ho, and independent lawmaker Yang Jeong-suk have expressed support, making passage highly likely. The entire content of the meeting will be disclosed to the media.
If approved by the Agenda Coordination Committee, it is expected to pass smoothly through the plenary session, the Legislation and Judiciary Committee, and the plenary session of the National Assembly. Considering the time required for the enactment of enforcement ordinances, the bill must be passed within this month to complete legislation before October. Previously, Google announced that starting in October, app developers listed on its app market, Google Play, will be forced to use in-app payments when selling content and items, and that it will take a 30% commission in this process.
The ruling party, which holds the majority of seats, plans to pass the bill within this month even without opposition cooperation, as the enforcement of in-app payments is imminent. Last year, seven bills were consecutively proposed in the National Assembly's Science and Technology Committee to prevent Google's unilateral commission abuse, but they remain pending without proper discussion. Unlike the Democratic Party, which urges swift action, the opposition People Power Party has expressed a cautious stance, citing concerns about trade friction and overlapping regulations.
However, recently, there has been a growing sense of urgency for the bill's passage. Even within the opposition, there is a consensus that the situation cannot be left as is ahead of the introduction of in-app payments. The burden from Google's commission increase will inevitably return to domestic creators and consumers of webtoons, web novels, and the entire digital content industry. Seo Beom-gang, chairman of the Korea Webtoon Industry Association, recently stated at a meeting, "If Google's in-app payment is enforced, e-book prices could rise by up to 40%, and the annual sales decline in the domestic content industry could reach 2 trillion won, exceeding 5 trillion won by 2025," criticizing that "unfair practices abusing Google's dominant monopoly position are clearly evident."
As of mid-October 2020. Since then, Assemblyman Jo Myeong-hee of the People Power Party also took the lead in proposing an amendment to the Telecommunications Business Act aimed at prohibiting app market operators from forcing payment methods and resolving related disputes.
◆Reviewing the Bills Under Discussion... Ban on In-App Payments, Equal Access to Content, etc.
The core of the previously proposed bills is the prohibition of in-app payments. The bills proposed in the second half of last year by lawmakers Park Seong-jung, Jo Seung-rae, Yang Jeong-suk, and Jo Myeong-hee include provisions preventing app market operators from forcing specific payment methods. The bills by Jo Seung-rae, Han Jun-ho, and Heo Eun-ah include prohibitions on app market operators forcing or inducing app developers not to register on other app markets. Additionally, the bills by Jo Seung-rae and Hong Jeong-min establish legal grounds for the Korea Communications Commission to conduct fact-finding investigations, request data submission, or issue corrective orders. Furthermore, Han Jun-ho's bill reflects the concept of 'equal access to content,' requiring mobile content providers of a certain scale to provide content to all app market operators without discrimination when content is supplied to a specific app market operator.
Currently, the Science and Technology Committee has completed an integrated working draft centered on the seven previously proposed bills. The Agenda Coordination Committee will discuss whether to submit this bill to the plenary session or submit it after partial amendments. Accordingly, the integrated bill is expected to focus on prohibiting forcing specific payment methods in app markets and banning app market operators from forcing or inducing registration restrictions on other app markets.
The integrated bill may also include measures to temporarily introduce or recommend the 'equal access to content' concept, which was introduced during the launch of IPTV to create fair competition conditions for new broadcasters, into the app market. This reflects a sense of crisis that proper competition is impossible solely by market forces. Due to Google Play's overwhelming dominance with a 70% market share in the domestic market, the domestic app market has long become a tilted playing field. The committee is considering introducing this only for businesses above a certain scale, excluding small and medium developers, to expand user choice and create an environment for fair competition.
Concerns about potential trade friction with the United States are also considered unlikely. Regina Cobb, a member of the Arizona House of Representatives who proposed a similar bill in the U.S., and the Coalition for App Fairness (CAF) have distanced themselves from concerns about trade friction arising from the passage of the Google Gapjil Prevention Act. The Korea Communications Commission, responsible for protecting internet service users, has also decided to support the bill's passage in the National Assembly. The Ministry of Science and ICT has expressed its willingness to actively accept the bill.
If the Google Gapjil Prevention Act passes in the National Assembly this month, Google's previous inducements such as half-price commissions will become ineffective. After the commission policy was disclosed, Google, facing massive criticism, decided to reduce commissions by 15% according to sales brackets, but this was also criticized as a mere trick. A representative from the Korea Internet Corporations Association urged swift passage, saying, "The bill must be passed this month to prepare enforcement ordinances before the forced implementation of in-app payments."
According to the Ministry of Science and ICT's fact-finding investigation, the commission paid by domestic companies due to Google's forced implementation of in-app payments is estimated to increase from a minimum of 88.5 billion won to a maximum of 156.8 billion won. In response to criticism of unilateral commission abuse, Google argued that the policy is for maintaining the Google Play ecosystem and supporting developers.
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