Kakao vs Google War... Han Sang-hyuk, Chairman of the Korea Communications Commission, "Calling Google and Kakao Tomorrow" (Comprehensive)

On the 7th, the Korea Communications Commission Listened to Opinions from Both Operators

Sanghyuk Han, Chairman of the Korea Communications Commission / Photo by Dongju Yoon doso7@

[Asia Economy Reporter Cha Min-young] Kakao and Google have come into direct conflict over Google's mandatory in-app payment policy (using the app market's own payment system). As Kakao has opposed Google's mandatory in-app payment policy and started directly distributing the installation file of the latest version of the KakaoTalk application (app), it has been found that installing KakaoTalk with this installation file makes it impossible to use Google's in-app payment. Amid strong criticism from the National Assembly toward the relevant ministry, the Korea Communications Commission, which stated it would "speed up the fact-finding inspection," is also calling both companies for an urgent meeting.

Chairman Han Sang-hyuk: "KCC to pursue meeting tomorrow"

Han Sang-hyuk, Chairman of the Korea Communications Commission (KCC), said in a press conference after the plenary session on the 6th, "We will create a place for the two companies to have close discussions, and we will also listen to opinions and understand the situation," adding, "We decided to meet executives from both sides (Google and Kakao) tomorrow to hear their opinions."

There has been criticism from the National Assembly and others that the KCC, as the relevant ministry, is doing nothing due to its policy of post-fact fact-finding inspections. Chairman Han said, "What we do is possible only if the prohibited acts are defined by law for post-action measures," explaining, "For example, if there is a regulation that prohibits something in advance and grounds for preemptive action, we would do so, but in cases where there is none, our job is to take measures after the fact."

He added, "In the meantime, it is the natural duty of the administrative agency to make efforts to resolve any inconvenience experienced by users." He explained that the meeting with the two companies tomorrow is also being pursued against this background.

The KCC is continuing discussions with Google and Kakao at the working-level department. A KCC official said, "Details such as the number of attendees and their ranks are being coordinated at the working-level."

Google payment unavailable when installed via APK

The war between Kakao and Google intensified earlier this month. On the 1st, Kakao posted a notice to users of KakaoTalk version 9.8.6 for Android, stating, "Android users who download the latest version of KakaoTalk through Daum search will temporarily be unable to use in-app payments."

Kakao also posted a web payment outlink, stating, "Purchases are always possible at the KakaoTalk Emoticon Shop, and it is available at a 20% discounted price compared to Google in-app payments."

This notice does not appear in lower versions of KakaoTalk (v9.8.0). Previously, Kakao requested Google to review the KakaoTalk app update, but on the 30th of last month, Google rejected the review of the latest version of the KakaoTalk app.

Google's rejection of the KakaoTalk app review is a retaliatory measure against Kakao for defying Google's mandatory in-app payment policy and maintaining a 'web payment' outlink that allows some paid content (KakaoTalk emoticons) to be purchased at a lower price.

As updating through Google Play became impossible, Kakao is temporarily distributing the KakaoTalk Android app installation file (APK) directly. When searching for KakaoTalk on the portal 'Daum' operated by Kakao, Android smartphone users are guided on how to download the latest version of KakaoTalk.

A Kakao official explained, "It is a natural phenomenon that in-app payment becomes impossible when upgrading via APK file installation," adding, "It is a simple technical issue, not that Google blocked in-app payments or that Kakao is forcing web payments."

Unexpected price competition

When users of KakaoTalk version 9.8.6 were forced to purchase emoticons only through web payments, Google launched a counterattack by offering a 2,000 won discount on paid content via Google in-app payments (limited to one purchase over 2,000 won).

In lower versions of KakaoTalk where in-app payments are still possible, users can purchase a 2,500 won emoticon for 500 won. This means emoticons can be purchased at a much cheaper price than through KakaoTalk web payments.

Although it cannot be definitively said that Google launched the discount event targeting KakaoTalk, the industry views it as an effect that forces users who have not yet updated to maintain the lower version of KakaoTalk.

An industry insider said, "KakaoTalk emoticons are sold around 2,000 to 2,500 won, and Google's 2,000 won discount is very radical," adding, "It is reasonable to suspect that Google was conscious of Kakao when setting the discount price."