Fair Trade Commission Finalizes Consent Decision with Google
Video-only Subscription, Previously Unavailable in Korea, to Launch at 8,500 Won
Price to Remain Fixed for at Least One Year After Launch
Google is set to launch 'YouTube Premium Lite' in Korea for the first time this year, offering ad-free video viewing, background play, and offline downloads on YouTube for a monthly fee of 8,500 KRW. The monthly subscription fees for both YouTube Premium and YouTube Premium Lite will be maintained for at least one year.
On November 27, the Korea Fair Trade Commission (KFTC) announced that it has finalized a consent decree related to Google's alleged violation of the Monopoly Regulation and Fair Trade Act (Fair Trade Act). Under the consent decree system, if a company suspected of violating the law submits a voluntary corrective plan that includes restoring the original state or compensating for damages, the authorities can conclude the case without determining the illegality or imposing sanctions.
Instead of confirming a legal violation regarding Google's practice of bundling its main product, YouTube Premium, with YouTube Music-thereby limiting domestic consumers' choices by forcing those who do not need a music service to purchase YouTube Music in order to avoid ads-the KFTC accepted Google's voluntary corrective measures.
Following the consent decree, Google will not only provide ad removal in YouTube Premium Lite, but will also add additional features such as background play and offline downloads. In addition, Google will contribute 30 billion KRW to the Educational Broadcasting System (EBS) to support the domestic music industry.
Since 2018, Google has offered a 'YouTube Premium' plan (14,900 KRW per month) that allows ad-free viewing on YouTube, which also included 'YouTube Music Premium' (11,990 KRW per month) at no extra cost. The KFTC determined that this practice constituted tying, which hindered fair competition with other music streaming services such as Melon, Genie Music, and FLO, and thus initiated regulatory proceedings, sending a review report to Google in July last year.
In February, Google submitted a statement to the KFTC directly rebutting the alleged legal violations outlined in the review report, but later shifted to resolving the issue through a consent decree. The KFTC decided to initiate the consent decree process in May, collected opinions from stakeholders, and finalized the consent decree through a full commission meeting on November 19.
Ad-Free Viewing Without Music... Background Play and Offline Downloads Also Available
In accordance with the consent decree, Google will introduce the 'YouTube Premium Lite' plan, which is a standalone video service. Through YouTube Lite, consumers can watch most videos posted on YouTube without ads, play them in the background, or save them to their devices for offline viewing without using mobile data.
Google plans to first launch the YouTube Lite product to a limited group of users, conduct a pilot operation for 4 to 6 weeks, and then make it available to all domestic consumers. The KFTC stated, "Google has expressed its commitment to ensuring the service is launched within this year."
The price of YouTube Lite is 8,500 KRW per month for Android and web users, and 10,900 KRW for iOS users. The KFTC explained, "YouTube Lite has been launched in 19 countries since March, and the price ratio of YouTube Lite to YouTube Premium in Korea is the lowest among these countries."
The price of YouTube Lite will be maintained for at least one year from the launch date. Even if there are future price changes, Google will ensure that the price ratio of YouTube Lite to YouTube Premium in Korea does not exceed that of other major countries offering the same features for four years from the launch date.
In addition, the current price of YouTube Premium will be frozen and not increased for one year from the launch date of YouTube Lite.
The 30 billion KRW contributed to EBS will be operated independently for four years to support domestic music industry programs. EBS plans to use the fund for the live performances and broadcast production of its professional music program 'Space Gonggam,' as well as for running the rookie discovery program 'Hello Rookie.'
The KFTC stated, "This consent decree demonstrates the advantages of the system by allowing detailed negotiations with the applicant on the specific conditions of the newly launched product in a tying case, resulting in effective corrective measures for restoring competition and protecting consumers. It is significant in that it promptly restored competitive order in the domestic online music service market and expanded consumer choice."
The KFTC explained that, together with the Korea Fair Trade Mediation Agency, it will thoroughly monitor and verify Google's compliance with the agreement four times a year on a quarterly basis.
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