Controversy Over the 'Google Gapjil Prevention Act': "Tying Sales" VS "Excessive Regulation"

Lim Jae-hyun, Executive Director of Google Korea, appeared as a witness at a public hearing on the "Partial Amendment to the Telecommunications Business Act" held on the 9th in the meeting room of the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Buaeri] A heated debate took place in the National Assembly over the so-called 'Google Gapjil Prevention Act,' aimed at blocking Google's policy of a '30% commission fee and mandatory in-app payments.' While some argued that the amendment should be passed to protect the app ecosystem, others expressed concerns about excessive government intervention.

On the 9th, the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee held a public hearing on the amendment to the Telecommunications Business Act regulating Google's in-app payment policy.

"Government intervention needed for platform monopolies"

At the hearing, Jeong Jong-chae, representative lawyer of the law firm Jeongbak, stated, "Although government intervention is excessive just because of a monopoly, the government must intervene in platform monopolies," emphasizing the necessity of the amendment by saying, "Google, as a market dominator, requires preemptive regulation." He criticized, "The app marketplace and the in-app payment system should be considered separate products," and added, "Mandatory in-app payments are a form of tying by a market-dominant business."

Kim Hyun-gyu, senior vice president of the Korea Mobile Game Association, said, "A 30% platform commission on the total sales of value-added communication service providers in the mobile game content ecosystem is excessive," and argued, "Except for small and medium developers, top-ranking companies in sales should be subject to the bill proposed by Assemblyman Han Jun-ho of the Democratic Party, which includes the 'Content Equal Access Right.'"

The amendment to the Telecommunications Business Act proposed by Assemblyman Han aims to grant the 'Content Equal Access Right,' which stipulates the obligation to provide content and prohibits discrimination so that both users and businesses can access mobile content without discrimination. According to the proposed bill, when a value-added communication service provider that registers and sells mobile content provides content to one app market operator, it must also provide it to other app market operators.

"No grounds for unfair trade practices... regulation is excessive"

On the other hand, Lee Byung-tae, professor at the Graduate School of Techno Management at KAIST, compared Google Play to a department store and argued, "There is no basis to consider Google Play's mandatory in-app payment as an unfair trade practice." He expressed the opinion that "this is an excessive government intervention attempting to control market rewards for corporate innovation."

Google reiterated the possibility of changing its business model if the amendment passes. Lim Jae-hyun, executive director of Google Korea, said, "Currently, about 95% of general apps are provided for free on Google Play, but if the bill passes, there may be changes to this business model itself." This suggests that if the bill passes and app market sales decline, commissions may be imposed even on apps and content currently distributed for free. Lim added, "Continuous investment is necessary, so a certain level of sales and profits are required."

Meanwhile, the Korea Internet Corporations Association (KICA), which includes Naver and Kakao, issued a statement after the public hearing urging the prompt passage of the amendment. In particular, KICA requested that the amendment include provisions to prevent ▲forcing app developers to use specific payment methods ▲unjustified delays or restrictions in app review ▲forcing unfair contract terms by exploiting superior bargaining positions ▲discriminatory treatment of app developers or apps ▲shifting refund responsibilities to app developers using payment methods provided by app market operators.

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