Google App Toll, Not Withdrawal or Reduction but 'Buying Time'... Startups File Complaint with Fair Trade Commission Today (Comprehensive)

[Asia Economy Reporter Seulgina Jo] "It's neither a withdrawal nor a reduction. A postponement is meaningless."

Domestic startups, fed up with Google's commission abuse, will file a complaint against Google with the Fair Trade Commission on the 24th. Despite being pushed into a wave of severe criticism, Google announced the day before that it would postpone the enforcement date of the 'mandatory in-app payment and 30% commission' policy in the Korean market. However, since the core issue?the commission policy itself?is still being enforced, the startups judge that "it is completely meaningless."

Inside and outside the industry, Google's postponement decision is being criticized as a 'trick' to block the passage of the anti-abuse law (Telecommunications Business Act amendment) in the political arena and to quell the criticism.

◆Domestic Startups Submit Complaint to Fair Trade Commission

The joint legal team, including the collective lawsuit legal platform 'Hwanan Saramdeul' and attorney Jongchae Jeong of Jeongbak Law Firm, will submit a complaint on behalf of app operators harmed by Google's in-app payment policy to the Fair Trade Commission at 2:30 p.m. on the same day. Attorney Jeong confirmed, "Google's mandatory in-app payment measure constitutes abuse of market dominance and unfair trade practices under the Fair Trade Act," and "We will visit Sejong City today (the 24th) as planned to submit the complaint."

The background of this action is the growing sense of crisis that if the commission abuse by the app market giant, which holds nearly 70% market share in Korea, is not stopped, the survival of domestic startups will be threatened, along with consumer harm and deeper dependence on the mobile ecosystem.

The joint legal team argued, "Google enforces in-app payments through its dominance over the operating system (OS) and app market and imposes an unbearable monopoly price (commission) of 30%. Startups face threats to their survival, mobile ecosystem innovation will disappear, and only dependence and vicious cycles will remain." Previously, Google came under fire for forcing app developers on Google Play to use Google's payment method (in-app payment) when selling content and items, while taking a hefty 30% commission in the process.

To prompt a swift decision and corrective order from the Fair Trade Commission, the joint legal team limited the complaint target to Google for now. The complaint also includes the Internet Enterprise Association, which includes Naver and Kakao, and the Korea Startup Forum representing 1,200 startups. However, it is reported that many startup stakeholders gave up filing complaints fearing retaliation from Google. Choroong Choi, CEO of Hwanan Saramdeul, emphasized, "The Fair Trade Commission should thoroughly investigate these circumstances as well."

Attorney Jeong said, "Competition authorities in major countries like the U.S. have begun investigating Google's antitrust behavior," and "The Fair Trade Commission should immediately start an investigation and impose sanctions." Currently, in the U.S., Spotify, a music streaming service, has filed a complaint with the Securities and Exchange Commission claiming that Google's in-app payment commissions are excessive, and a similar class-action lawsuit is underway.

The Fair Trade Commission plans to examine whether Google's policy to impose a 30% app commission violates the Fair Trade Act by abusing its market-dominant position based on the complaint. Chairman Seongwook Cho of the Fair Trade Commission previously stated at a National Assembly audit, "If a market-dominant business operator engages in acts that hinder competition, the Fair Trade Act can be applied."

◆Google's Trick to Block Anti-Abuse Law?

Inside and outside the industry, Google's decision to postpone the application date of the commission for new apps from January next year to September has also been criticized as a 'trick.'

A startup official said, "It's neither a withdrawal of the commission policy nor a reduction of the commission rate like Apple," adding, "It means they will enforce it again once the criticism dies down." Attorney Jeong also pointed out, "It's a trick to block the passage of the Google Anti-Abuse Law." It is claimed that Google is buying time by supporting the opposition party, which has advocated caution, to prevent the law's passage within this year.

Amid growing political and public pressure on the commission policy, Google finally pulled out the postponement card after Apple recently lowered commissions by half for small and medium developers. Google, which had argued it was following the policy of another app market operator (Apple), lost its justification for pushing forward. Apple not only lowered app commissions but also announced additional measures on the same day to exempt businesses conducting digital classes and virtual events through iPhone apps from paying the 30% in-app payment commission until June 2021.

Accordingly, there are also opinions that the passage of an effective Google Anti-Abuse Law has become even more important. Although Google appears to have stepped back, it is merely delaying time with a 'postponement' rather than an actual withdrawal or commission rate reduction.

The Democratic Party, which is actively pushing for the Google Anti-Abuse Law, plans to continue its offensive. Seungrye Cho, the ruling party's spokesperson on the Science, ICT, Broadcasting and Communications Committee, emphasized on Facebook the day before, "There were great concerns about the damage to domestic developers caused by the mandatory in-app payment and the increased costs passed on to consumers," and "We will take a more proactive stance to create fundamental measures to prevent domestic companies from suffering damage." He also expressed regret, mentioning that the People Power Party suddenly changed its stance during the bill's promotion, causing difficulties.

The National Assembly's Science, ICT, Broadcasting and Communications Committee is expected to hold a second subcommittee meeting this week to discuss related matters. Seongjoong Park, a People Power Party lawmaker who had introduced the bill but suddenly advocated caution and stalled the Anti-Abuse Law, argued, "Google should make a more progressive decision than Apple, such as lowering commissions."

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