Launched at 8,500 won for Android and 10,900 won for iOS
150 billion won each pledged for consumer redress and industry support
Google, which was at the center of the controversy over bundling YouTube Music, will launch a standalone video subscription product priced at 8,500 won (for Android) within this year. In addition, the company has pledged to spend a total of 30 billion won over the next four years on consumer redress and support for the domestic music industry.
On July 15, the Korea Fair Trade Commission (KFTC) announced that it had prepared a provisional consent decree regarding Google's alleged violation of the Monopoly Regulation and Fair Trade Act (the Fair Trade Act). The provisional consent decree will be finalized after a 30-day period for collecting opinions from relevant ministries and stakeholders, followed by deliberation at the KFTC's plenary session. If the decree receives final approval from the plenary session, Google will avoid administrative sanctions such as fines.
The main points of the provisional consent decree are the launch of "YouTube Premium Lite," a standalone YouTube video product, at 8,500 won for Android and web users and 10,900 won for iOS users, as well as the creation of a 30 billion won mutual growth fund.
The standalone YouTube video product is a separate offering from the existing YouTube Premium plan, with YouTube Music excluded. It is identical to the plan already available in nine countries overseas (including three countries where test pricing is in effect). If subsequent procedures proceed smoothly, the product is expected to launch domestically within this year.
New subscribers to the product (including those switching from YouTube Premium) will receive a two-month free trial. Even after the launch of the new product, consumers will still be able to use the existing YouTube Premium and YouTube Music Premium plans.
Kim Moonsik, Director General of Market Surveillance at the KFTC, explained, "This price is 57.1% of the current domestic YouTube Premium price for Android and web users, and 55.9% for iOS users. This price ratio is the lowest compared to other countries where YouTube Lite has officially launched."
The price of YouTube Premium Lite will be frozen for at least one year from the launch date, and for four years thereafter, the price ratio compared to YouTube Premium will not exceed that of major overseas countries. The price of YouTube Premium itself will also be frozen for one year from the launch of YouTube Premium Lite.
Director Kim stated, "In principle, the price of YouTube Premium is not subject to the consent decree. However, given the recent series of price increases for subscription products and the resulting increased financial burden on consumers, we discussed ways to maintain the price."
In addition, Google has agreed to contribute a total of 30 billion won to funds for consumer redress and other initiatives. Of this, 15 billion won will be used to provide free and discounted benefits to YouTube Lite subscribers, and another 15 billion won will be allocated to support programs for the domestic music industry.
The free and discounted benefits will include a two-month extended free trial worth a total of 7.5 billion won for domestic consumers. This will be available to both new users of YouTube Lite and existing YouTube Premium users who switch to YouTube Lite. Through partnerships with resellers, an additional 7.5 billion won worth of YouTube Lite price discounts will be provided. As a result, a total of 2.1 million domestic consumers will benefit from these offers.
Furthermore, 15 billion won will be allocated to support the domestic music industry, including discovering and nurturing up to 48 new artists over four years, and running programs to support up to eight artists in expanding their presence overseas over four years. The domestic music industry support program will be newly established for the purpose of the consent decree and will be operated separately from existing programs.
The consent decree is a system in which a company suspected of violating the law proposes measures for restoration and redress, and if the validity of these measures is recognized, the case is closed without determining whether a violation actually occurred. This system offers the advantage of providing practical relief to consumers and restoring competitive order quickly.
The KFTC stated, "In cases involving product bundling, the consent decree method is more effective in achieving the goals of consumer protection and competition promotion, as it allows for concrete negotiations with the company on corrective measures. If an administrative lawsuit is filed, it would take more than four to five years for the product to be released."
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