[Summary] "Stop Google and Apple’s Abuse of Power," Epic Games CEO Visits Korea... Moves Toward Global Solidarity

[Asia Economy reporters Seulgina Jo and Minyoung Cha] "The argument is not that the commission fee should be zero. It is that the monopoly position held by application markets should not be abused."

When South Korea became the first country in the world to pass the 'Google Fair Trade Act (Amendment to the Telecommunications Business Act),' Tim Sweeney, CEO of Epic Games, who made headlines by posting a welcoming message saying "I am Korean," visited the Korean National Assembly on the 16th to raise his voice for fairness in the global app ecosystem. International cooperation to stop the commission fee abuses by the dominant Google Play Store and Apple App Store appears to be gaining momentum centered on South Korea.

◇Epic Games CEO who shouted "I am Korean" visits South Korea

On the morning of the 16th, CEO Sweeney attended the 'National Assembly Seminar for Fairness in the Global App Ecosystem,' hosted by Seungrae Cho, the ruling party whip of the National Assembly's Science, Technology, Information and Broadcasting Committee, and other Democratic Party lawmakers. He stated, "South Korea's law prohibiting forced in-app payments will have a positive impact not only on the app ecosystem but also on future innovation and healthy market competition."

Previously known for his statement "I am Korean," CEO Sweeney emphasized the significance of the enforcement of the Google Fair Trade Act by saying, "I am proud to say 'I am Korean'." He said, "Google and Apple monopolize operating systems (OS) and use their monopoly status to hinder competition in payment processing. While it is fair for them to earn revenue from their efforts, they should not block competition or impose commission fees through their monopoly status." He added, "If South Korea succeeds in this fight for fair competition, consumer prices will improve, and creators will compete more fairly."

He also said, "We are not here to discuss whether Google's 26% commission fee is too high or should be lowered. The point is that the monopoly position held in the app market should not be abused and extended to other markets."

Besides CEO Sweeney, the seminar was attended by Megan Dimuzio, Secretary-General of the U.S. Coalition for App Fairness (CAF), Cedric O, France's Minister of Digital Affairs, Mark Buse, founding member of CAF and Senior Vice President of Match Group, among others. They criticized the app commission fee policies of Google Play and Apple App Store, which leverage their overwhelming market dominance, and listened closely to South Korea's legislative experience as the first country to enact related regulations. They also explored international cooperation measures involving the U.S., Europe, and other regions.

Domestically, participants included Wonwook Lee, Chair of the National Assembly's Science, Technology, Information and Broadcasting Committee, Hyun Kim, Vice Chairman of the Korea Communications Commission, and Seongho Park, Chairman of the Korea Internet Corporations Association. Executives from Korea's leading game companies known as the '3N'?Nexon, Netmarble, and NCSoft?as well as the Korea Game Industry Association, were also present.

In particular, the seminar drew positive evaluations from global figures regarding South Korea's pioneering enforcement of the Google Fair Trade Act, which prohibits app market operators from forcing specific payment methods. There is also speculation that such changes will spread internationally, starting from South Korea.

Secretary-General Dimuzio described the Google Fair Trade Act as "world-leading legislation," noting that major countries worldwide are closely watching South Korea's actions. Senior Vice President Buse also said, "With this legislation, South Korea has declared to the world that monopolistic behavior by app market operators is unacceptable."

Attending via video, Sijo Kuribula, Chair of India's ADIF, quoted Mahatma Gandhi's famous saying, "My concept of democracy is that the weakest should have the same opportunity as the strongest," and evaluated, "The passage of South Korea's amendment clearly exemplifies this." He added, "South Korea's legislative action is a highly significant achievement globally in correcting the tilted fairness of the app economy," and said, "India's antitrust authorities have introduced it into their investigations and are striving to enact similar laws in India."

Match Group CEO Shar Dubey also spoke via video, saying, "Countries including the U.S., Europe, India, Japan, Australia, Russia, and South Africa have launched additional investigations and fact-finding missions," and emphasized, "The only sustainable path is for these gatekeepers (Google, Apple, etc.) to find ways to coexist long-term without imposing excessive burdens on domestic and international developers."

In the U.S., related discussions are expanding, led by some members of Congress. Republican Congresswoman Marsha Blackburn, who introduced the 'Open App Market Act' along with Representatives Richard Blumenthal, Amy Klobuchar, and Shang Wen, said, "We have a responsibility to set new standards for creators, innovators, and small business owners," explaining, "The core is to create clear and enforceable rules for app market operators and content creators."

Representative Cho said, "We will share South Korea's world-first legislative experience and establish a solid international cooperation system so that the U.S., Europe, and other countries can follow suit."

◇Heated controversy over loopholes, Apple resists...Need for global solidarity

This seminar attracted even more attention as it was held amid heated controversy over Google's commission fee loopholes following the enforcement of the Google Fair Trade Act.

Two months after the enforcement of the Google Fair Trade Act, controversies over 'high commission fees' and 'app tolls' surrounding the app market giants continue unabated. Google, which announced it would allow external payment methods out of respect for the National Assembly's decision, has been embroiled in loophole controversies, while Apple has shown signs of resistance. Voices calling for strengthening the law's effectiveness and establishing an international cooperation system are growing louder.

Google's payment system change plan, unveiled earlier this month, allows third-party payment methods but charges a 26% commission fee and eliminates the benefits of external payments, drawing criticism that there is effectively no improvement. The Korea Webtoon Industry Association and others pointed out, "Considering that an additional 6-7% fee must be borne for external payments, there is little difference from the existing 30%," calling it "a loophole to force Google in-app payments."

Apple's stance is even more rigid. Apple, another target of the law, reportedly maintains that its current policy complies with the amended law and refuses to accept changes. Representative Cho criticized, "Apple is finding ways to evade the law and has not proposed any measures."

Global figures attending the seminar repeatedly emphasized the need for global solidarity to enhance the law's effectiveness. Minister Cedric O stressed, "Regulations must be flexible to solve future problems at the pace of the market so that they do not become laws regulating yesterday's digital market," and added, "This is why I am here, and cooperation among more countries such as the U.S. and Europe is necessary."

Megan Dimuzio, Secretary General of the U.S. App Fairness Alliance (CAF)

There were also calls for tighter regulations. Secretary-General Dimuzio evaluated, "When the law was passed in August, Apple and Google started a new game rather than complying with the law."

The Korea Communications Commission, the competent authority, plans to announce the enforcement decree of the amendment soon to enhance the law's effectiveness. It is expected to include measures to practically sanction Google, Apple, and others who continue commission fee abuses. The previously disclosed draft enforcement decree and notification include provisions to impose fines of up to 2% of sales revenue for violations. The Commission is also considering whether to include the phrase "acts imposing unreasonable or discriminatory conditions on other economic benefits" in the enforcement decree. A Commission official said, "We are aware of the loophole controversy and are examining the relevant provisions more closely."

Experts also agree on the need to expand cooperation with the U.S., the European Union (EU), and others, while actively fostering the domestic app market to revitalize the market. Yonghee Kim, professor of business administration at Soongsil University, emphasized, "The bigger problem than the commission rate is that the app market giants set the transaction rules arbitrarily," and stressed the need for international cooperation.

Jeonghyun Wi, professor of business administration at Chung-Ang University and vice president of the Korea Game Society, said, "Market competition activation is urgent," and suggested, "Content equal access rights should be recognized so that other app market operators can compete together, and institutional support for small and medium developers should be provided." Content equal access rights mean that app developers and content providers register their apps on all domestic app markets. This was excluded at the last minute during the National Assembly discussions due to concerns that some app market operators might benefit.

Yoonjung Kim, research fellow at the Korea Legislation Research Institute, also said, "It is naturally necessary to revitalize the domestic app market," adding, "Because competition is needed regardless of nationality."