[Summary] 'Google Gapjil Prevention Act' Passed by the Legislative Judiciary Committee... World's First In-App Payment Regulation Imminent

Yoon Han-hong, the whip of the People Power Party's Legislation and Judiciary Committee, and other lawmakers attended the plenary meeting of the National Assembly's Legislation and Judiciary Committee on the 24th, displaying opposition phrases against the "Media Arbitration Act Amendment." Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Eunmo Koo] The so-called “Google Gapjil Prevention Act (Amendment to the Telecommunications Business Act),” which prohibits app market operators from forcing specific payment methods, has passed the National Assembly’s Legislation and Judiciary Committee one year after its proposal. If the amendment passes the plenary session of the National Assembly, South Korea will become the first country to legally regulate in-app payments by app market operators such as Google and Apple.

Google Gapjil Prevention Act Passes National Assembly Legislation Committee... Over the 90% Mark

On the 25th, the National Assembly’s Legislation and Judiciary Committee held a plenary meeting and passed the amendment to the Telecommunications Business Act, which prevents Google from unilaterally changing its commission policy. This came about a month after the bill was approved at the National Assembly’s Science, Technology, Information and Broadcasting and Communications Committee plenary meeting on the 20th of last month.

The Democratic Party of Korea processed the amendment to the Telecommunications Business Act, which is the in-app payment prevention law, solely with the ruling party during the plenary meeting. Members of the People Power Party collectively walked out in protest against the meeting operation method of Acting Chairman Park Jumin of the Legislation Committee.

The prohibition clauses to prevent Google’s in-app payment enforcement focus on three key points: ▲ abusing transactional status to force a specific payment method ▲ unjustifiably delaying the review of mobile content, etc. ▲ unjustifiably deleting mobile content, etc.

However, the Legislation Committee deleted Article 50, Paragraph 1, Items 10 and 13 from the amendment originally approved by the Science, Technology, Information and Broadcasting and Communications Committee. These items regulated acts such as unfairly forcing or inducing app market operators not to register mobile content, etc., on other app markets, and unfairly imposing discriminatory conditions or restrictions on mobile content providers by app market operators. This was a result of coordination between the Fair Trade Commission and the Korea Communications Commission to avoid overlapping regulations.

With the Google Gapjil Prevention Act passing the Legislation Committee, the ball is now in the plenary session’s court. If the amendment passes the plenary session of the National Assembly this afternoon, South Korea will become the world’s first case to legally regulate in-app payments by app market operators such as Google and Apple. Currently, the Democratic Party is showing strong determination to process the bill, and it holds a majority of 171 seats, enough to pass the bill unilaterally in the plenary session, making the bill’s passage highly likely. Considering that it usually takes 2 to 3 months to enact enforcement ordinances, this National Assembly schedule is expected to be the last practical opportunity to pass the bill before Google’s in-app payment enforcement begins in October.

However, it is uncertain whether the amendment will be submitted to the plenary session. The National Assembly Act stipulates that bills passed by the Legislation Committee on the same day cannot be brought to the plenary session to allow for deliberation.

Google: “Hasty Legislation Risks User Harm”

[Image source=Reuters Yonhap News]

In-app payment is a method that requires payment for paid apps and content only through an internally developed payment system. Last year, Google decided to expand in-app payments, which had been applied only to game apps, to all apps and content starting this October. This decision means imposing a 30% commission on payment amounts for all content such as games, music, and webtoons, raising concerns in the industry that it will lead to price increases for content and increased burdens on mobile content consumers. The National Assembly promptly introduced the Google Gapjil Prevention Act in response.

Since Google announced its in-app payment enforcement policy, app developers both domestically and internationally have continuously voiced opposition, fearing the impact it will have. On the 19th, ICT organizations including the Korea Internet Corporations Association sent a joint letter to ruling and opposition members of the National Assembly’s Legislation Committee, expressing concern that “if Google’s in-app payment enforcement policy is fully applied from October, many young creators will lose their motivation and foundation for creation, and South Korea’s content ecosystem will be devastated.”

Meanwhile, in the United States, the “Open App Market Act,” which prohibits forced in-app payments by app markets, has been introduced in the Senate. Earlier, 36 states including Utah and New York, as well as Washington D.C., filed antitrust lawsuits against Google. Additionally, last month, the Coalition for App Fairness (CAF) and Match Group sent a letter to Democratic Party lawmaker Cho Seung-rae of the Science, Technology, Information and Broadcasting and Communications Committee, opposing Google’s in-app payment enforcement policy and requesting international solidarity.

Google pointed out that South Korea is hastily introducing the bill without sufficient consideration for user protection. If individual vendors build their own payment systems, it becomes difficult for app market operators to manage and respond to issues such as refunds, fraud, and unused authorizations. Furthermore, if South Korea passes and enforces antitrust laws on in-app payments, it is expected that other countries will follow with similar laws banning forced in-app payments, which is a burden for Google.

On the 16th of last month, Google also announced on the official Android developer blog that it would grant a six-month extension after carefully considering the responses of both large and small developers, but it failed to persuade the industry and political circles.

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