Google circumvents the law and indirectly forces app developers to use their own payment system.
In early November, Google announced that the company had changed its controversial in-app payment policy to align with South Korea’s revised telecommunications law, referred to as the “Anti-Google Law”. With that said, it seemed that South Korea, as the first country in the world, was well on its way to taking control of the iron fist of US technology bulldozers on the application ecosystem.
Google has introduced commissions that make other people’s payment systems more expensive than Google’s
But less than a week after the law went into effect before South Korean authorities were once again sitting in the middle of a battle between local developers and Google. The developers were not at all impressed by Google’s adaptations to the new legislation and called Google’s alleged changes a hoax. Google offered commissions that make other options more expensive than Google’s own payment system, they claimed.
hard vs hard
The Korea Internet Companies Association, the Korea Enterprise Forum, and the Korea Mobile Game Association have sent their concerns to the Korea Communications Commission (KCC). The KCC says they want to make sure the regulations also prevent app stores from forcing their systems to be used using indirect methods.
ITAVISEN: South Korea adopts anti-Google/Apple law
The authorities will intervene if it turns out that Google’s new commission policy puts developers at a disadvantage when using third-party payment systems and threatens fines of up to 2% if they do not comply with the law.
Four percent off
Google said it allows freedom of choice regarding payment options for digital purchases made on Google Play in South Korea. The company added that developers who choose alternative payment systems will receive a four percent commission reduction. This means Google will charge a 30 percent commission on payments made using its own billing system, but “only” 26 percent on purchases via other systems.
Had to go back to Google
In the industry, the cost of a third-party payment system is claimed to easily outweigh the four percent discount. One app developer, unhappy with Google’s “version” of the payment system, added that Google’s new commission system is an apparent attempt to circumvent the law so that it appears to be a mockery of lawmakers. With costs of 26 percent in addition to their payment system, developers will be forced to switch back to Google’s payment system.
Apple “sees no need”
Apple, which operates another major app store, has not commented on the in-app payment policy other than claiming in October that the company’s policy was already in line with the new legislation and that no changes were needed. The Korean authorities rejected Apple’s position and demanded that they provide an alternative plan, otherwise the company risks sanctions.
Apple has not yet given any official reaction to this matter, but Tim Cook is reported to have indicated in a board meeting that Apple is not willing to comply with the new South Korean law.
South Korea’s new legislation has attracted attention because it could be a first step toward stronger international regulation for the tech giants. Perhaps this is the opportunity that worries both Tim Cook and Google.
epic vs apple
Tim Sweeney of Epic continued his attack on Google and Apple during the World Mobile App Ecosystem Justice Conference in Sys-Korea recently when he praised the new legislation in South Korea and said “Apple must be stopped”.
I am very proud to stand up to these monopolies with you. I’m proud to be with you and say “I’m Korean”.
Sweeney accused Apple of ignoring Korean democracy, noting that it had also entered into agreements with the Chinese authorities to store the personal data of the country’s residents on servers operated by a Chinese state-owned company.
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