[2020 National Audit] "Google Shares Revenue with Telecoms and Manufacturers" Collusion Controversy

[Asia Economy Reporter Bu Aeri] Amid this year's National Assembly audit where the 'Google in-app payment and 30% commission' mandatory policy became a hot issue, controversy has arisen as Google is accused of sharing commissions with the three major domestic mobile carriers.

[Image source=Yonhap News]

"Google shares commissions with mobile carriers and manufacturers"

According to Yoon Young-chan, a member of the National Assembly's Science, Technology, Information and Broadcasting Committee from the Democratic Party of Korea, on the 23rd, evidence has emerged that Google uses mobile carriers and manufacturers to prevent competitor apps from being pre-installed on smartphones.

The U.S. House Judiciary Committee's Antitrust Subcommittee released a 449-page report on the 6th of this month, stating that Google, Amazon, Apple, and Facebook are abusing their monopolistic market dominance.

According to Representative Yoon, the report includes details that Google requires smartphone manufacturers to pre-install specific apps such as 'Google Search' and 'Google Play Store,' while preventing competing search service apps from being pre-installed or installed.

Earlier, the European Union (EU) Commission had accused Google in 2016 of entering into agreements with phone manufacturers to prevent them from installing competing operating systems (OS) on mobile devices.

Representative Yoon pointed out, "Google technically controls manufacturers through proxy agreements to monopolize the OS, obstructing manufacturers and carriers from installing competing apps," adding, "Furthermore, it shares search advertising revenue with manufacturers and carriers such as Samsung and LG."

Lee Young, a member of the People Power Party, also revealed at the Financial Services Committee audit the previous day, "According to Google Korea's data, currently, for game apps, mobile carriers charge up to half of the in-app payment commission from Google Play in exchange for providing payment methods based on telecommunication billing."

Currently, game companies pay Google a 30% commission on in-app payments. It was previously known that Google kept the entire 30% commission, but it has now been revealed that up to 15% actually goes to mobile carriers.

Representative Lee criticized, "Credit card companies or payment gateway (PG) providers take about 2.5% commission," adding, "If Google changes its commission policy, not only the giant platform but also the major mobile carriers could gain excessive profits."

Korea Internet Corporations Association expresses regret over mobile carriers and manufacturers cooperating with Google and Apple’s market monopolization

Upon learning of these facts, the Korea Internet Corporations Association (KICA) and Korea Startup Forum (Kospo) expressed regret. KICA is an organization that includes companies such as Naver and Kakao.

KICA and Kospo stated, "The three major mobile carriers, who shared in-app payment revenues while ignoring the public's communication fee burden, must immediately stop actions that exacerbate public harm," and "We deeply regret the behavior of the three carriers that have increased the burden on content usage fees by sharing Google's excessive commissions."

They urged, "Mobile phone manufacturers must stop cooperating with Google and Apple in forming market-dominant positions," emphasizing, "A thorough government investigation and legislative action by the National Assembly are urgently needed to create a fair internet ecosystem and prevent recurrence of unfair practices."

This content was produced with the assistance of AI translation services.