E-book Upload Reported to Publishing Association
Civic Group "Must Take Proactive Measures"
[Asia Economy Reporter Lim Hye-seon] Google has significantly increased in-app payment fees and restricted outlink payment methods within applications. Content producers (CP) and civic groups have demanded a fact-finding investigation and administrative sanctions from the Korea Communications Commission (KCC), but the KCC is at a loss with no effective measures.
Aftermath of In-App Payment, E-books Also Get More Expensive
According to the industry on the 12th, the Korea Publishers Association reported Google's Play Store in-app payment policy to the KCC on the 8th for violating the Telecommunications Business Act. In-app payment is an internal payment system operated by app market operators like Google and Apple. Through in-app payments, Google takes up to 30% of the payment amount as a commission. In 2020, Google made in-app payments mandatory, causing controversy, and the National Assembly passed an amendment to the Telecommunications Business Act (known as the Google Gapjil Prevention Act) last August, prohibiting app market operators from forcing in-app payments.
Although the 'Google Gapjil Prevention Act' was enforced on the 15th of last month, Google only allowed app developers to use in-app payments or third-party payment methods within the in-app payment system and blocked payments made via external links on web pages. The commission rate for third-party payments within apps was set at a maximum of 26%. Including card fees, this is not much different from Google's payment fee (maximum 30%). As a result, from this month, online video services (OTT), music streaming services, and others have started raising app subscription prices.
The Publishers Association, with legal advice from the law firm Jahyang, argued that Google's payment policy constitutes a 'forced use of a specific payment method.' They also emphasized that if Google's unfair trade practices continue, the burden of payment fees on app developers will increase, ultimately passing costs on to consumers purchasing digital content.
Civic Groups and National Assembly Also Call for Preemptive Measures
The civic group YMCA also stated, "The KCC must mobilize all available means to take preemptive action against foreign operators who evade domestic laws and disrupt market order." YMCA pointed out that consumer harm continues as content prices rise due to Google's forced in-app payment practices.
The National Assembly is also demanding solutions from the KCC regarding Google's behavior. At the full meeting of the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee held on the 30th of last month, members strongly urged KCC Chairman Han Sang-hyuk, saying, "The situation following the passage of the Google Gapjil Prevention Act is directly contradicting the law's intent," and "Do not remain idle; take a clear stance, accurately recognize the situation, and take firm measures." The background of the bill was to ensure an environment where app developers can choose their payment systems freely, but committee members believe this intent is being cunningly distorted. In response, Chairman Han said, "We will actively review violations according to the enforcement decree of the law, and if there is a possibility of violation, we will conduct a fact-finding investigation and proceed to administrative sanctions."
‘Possibility of Violation’ Legal Interpretation Issued but...
The KCC issued a legal interpretation stating that Google's current in-app payment policy has a possibility of violation. However, no fact-finding investigation is underway. A KCC official stated, "Since no actual violations such as app deletions by Google have occurred yet, we have not been able to proceed with a fact-finding inspection." In other words, unless Google removes apps that violate its policy from the Play Store, it is difficult for the KCC to intervene.
The KCC said that if violations occur, it will impose enforcement fines, open an 'App Market Unfair Practice Report Center,' and form an 'App Market Damage Relief Support Group' to actively support domestic CPs, but preemptive action is difficult. This is because if the KCC takes preemptive measures, Google is highly likely to file an administrative lawsuit.
Google stated, "We are reviewing the KCC's legal interpretation," and added, "Google continues to invest in the mobile ecosystem and strives to provide a safe and high-quality user experience for all users." If the issue escalates to an administrative lawsuit, the key point will be how the restriction of outlinks will be legally judged.
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