"Fee Reduction Is a Trick"... Growing Support for the 'Google Gapjil Prevention Act'

[Image source=Yonhap News]

[Asia Economy Reporter Bu Aeri] Google, which was embroiled in a power abuse controversy, announced a ‘15% commission reduction’ policy in an attempt to calm public opinion, but the response from the domestic IT industry remains cold. This is because the mandatory use of Google’s payment system, which enforces in-app payments, remains unchanged. The industry’s demand for the enactment of the ‘Google Power Abuse Prevention Act’ is pouring in, and with the ruling party showing strong determination, discussions for legislation are gaining momentum again.

According to Google on the 18th, the company decided to lower the commission charged to app developers using the Google payment system from 30% to 15%, effective July 1. However, this only applies to annual sales of $1 million (approximately 1.1 billion KRW) or less. Developers exceeding 1.1 billion KRW in sales will be charged a 30% commission only on the excess amount.

At first glance, it seems that Google has proposed a dramatic ‘half-price discount,’ but the industry’s view is that this is not the case. According to the Korea Internet Corporations Association, which includes Naver and Kakao, if Google’s reduction plan is applied to 246 companies surveyed by the Ministry of Science and ICT, Google would incur a loss of 40.6 billion KRW. However, the additional fees Google will collect from in-app payments in non-gaming sectors amount to 510.7 billion KRW. In conclusion, Google gains an additional profit of 470.1 billion KRW.

For this reason, the IT industry points out that Google is using a trick by highlighting only the commission reduction figure to block the passage of related bills that prohibit the mandatory use of in-app payments. Kim Jaehwan, Policy Director of the Korea Internet Corporations Association, criticized, “Although the essence of the issue is that the app market operator forces a specific payment method, continuously focusing on the commission issue is a superficial gesture that ignores the core problem.”

Currently, seven amendments to the Telecommunications Business Act have been proposed in the National Assembly to prevent app market operators with monopolistic status from forcing specific payment methods. The National Assembly’s Science, Technology, Information and Broadcasting Committee, led by the ruling party, shows strong will to pass the bills. Lee Wonwook, chairman of the committee and a member of the Democratic Party of Korea, stated immediately after Google’s announcement of the reduction plan, “We will make legislative efforts to ensure the continuous fairness of app markets, including policies responding to in-app payments.” Even the opposition party has expressed disappointment with Google’s reduction plan. A ruling party official from the committee said, “During the last subcommittee discussion, there was already bipartisan consensus on the bill.”

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