[Asia Economy Reporter Kang Nahum] The government has initiated the enforcement of the 'Google Gapjil Prevention Act' to block Google's mandatory in-app payment system (using the app's internal payment system), but Google has countered by raising third-party payment fees, cunningly forcing app developers to use only its own in-app payment system, effectively nullifying the law. If no countermeasures are taken, price increases for various content and services such as OTT and webtoons will be inevitable, which is expected to deal a significant blow to the domestic content market.
◆ Google's Trick Mocking the Law = According to Google's Play payment policy on the 22nd, from now on, app developers are only allowed to use Google Play in-app payments or third-party payments within in-app payments. The fees for these payment methods are up to 30% and 26%, respectively. The outlink self-payment method, which app developers have used to avoid fee burdens, will no longer be allowed. If these in-app payment policies are not followed, app updates will be blocked from April, and apps will be removed from the app market starting June.
This behavior contradicts the purpose of the recently amended Telecommunications Business Act, known as the 'Google Gapjil Prevention Act.' The Telecommunications Business Act prohibits forcing a specific payment method by making it difficult or inconvenient to access or use other payment methods. Google claims it is not violating the law because it allows third-party payment methods, but the industry points out that Google is inducing the use of in-app payments by imposing an excessive 26% fee on third-party payment methods.
An industry insider said, "Even if you choose the third-party payment method, when you add payment gateway (PG) and card fees, the total fee exceeds 30%, resulting in a loss," adding, "In effect, Google is inducing in-app payments."
Another app market operator, Apple, is also expected to follow Google's lead. Apple has only expressed its intention to comply with the law but has yet to take any legal compliance measures such as changing its payment policies.
◆ Domino Price Increases Due to Google Fees = From the developers' perspective, if they have to pay Google fees as high as 30%, they have no choice but to raise service prices. KT's OTT service Season is considering a price increase. On the 18th, Season announced, "Due to the mandatory application of Google's in-app payment, the prices of products (subscriptions, Coco) and content purchase methods provided in the Season Android app may change." Not only Season but also other domestic OTTs such as Wavve, Tving, and Watcha are reportedly reviewing subscription fee increases.
Content creator groups sensitive to fees are also criticizing Google's behavior. A representative from the Korea Webtoon Industry Association said, "If fees increase due to the forced use of a specific payment system, the burden will primarily fall on creators. Google's policy change is a stance that significantly contradicts diversity in the cultural industry."
The government is also expressing difficulty. The original intent of the law was to prohibit forcing in-app payments, but Google is circumventing this, leaving no way to regulate it. The Ministry of Science and ICT, the competent authority, is promoting a plan to activate third-party payment methods conducted via websites outside the app, but from the user's perspective, this is inconvenient as they have to separately access the website to pay usage fees.
Domestic app markets are emerging as alternatives to Google Play, but it is not easy. Google Play's market share in the domestic app market exceeds 70%, an overwhelming level. The domestic app market 'One Store,' which recently surpassed Apple to become the second largest, still has limitations in terms of user scale and recognition. An industry insider said, "Many recently released games and webtoons are produced targeting the global market, so considering scalability, it is not feasible to rely solely on One Store."
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