World's First Google Antitrust Law Passed... IT Industry Relieved "Creating a Fair App Ecosystem" (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Buaeri] The Google Gapjil Prevention Act (Amendment to the Telecommunications Business Act) passed the National Assembly plenary session on the 31st.

South Korea has become the first country in the world to regulate the forced in-app payment by app market operators.

The Google Gapjil Prevention Act primarily prohibits app market operators from abusing their position to force mobile content providers to use a specific payment method.

The Google Gapjil Prevention Act was proposed in the National Assembly in July last year and went through more than a year of trials before bearing fruit.

It faced opposition from the People Power Party citing trade issues with the United States, and whenever the bill seemed likely to pass, Google announced policies such as commission fee reductions, causing further difficulties. Later, it faced another crisis due to conflicts over 'overlapping regulations' between the Fair Trade Commission and the Korea Communications Commission, but it dramatically passed the Legislation and Judiciary Committee on the 25th. At the last moment, the plenary session was postponed twice, causing anxiety.

Previously, Google announced plans to expand mandatory in-app payments, which had applied only to games, to content apps such as webtoons, music, and videos, imposing a 30% commission fee on payment amounts. After continued backlash from the domestic IT industry, Google proposed lowering the commission to 15% and deferred the measure until March 31 next year for companies that applied, but conflicts persisted.

With the amendment passed, it is expected that from October, Google's policy forcing the use of its own payment system for in-app payments will also be nullified. This will also prevent an annual content sales decline of 2 trillion won.

Professor Yoo Byung-jun of Seoul National University’s Business Administration Department previously analyzed that Google's in-app payment policy implementation was expected to cause an annual sales decrease of 2.1127 trillion won in the content industry in 2021. Considering the content industry’s annual growth rate of 10.3%, Professor Yoo estimated that by 2025, the sales decline would reach 5.3625 trillion won.

The industry also expressed a welcoming stance on the day. Park Sung-ho, chairman of the Korea Internet Corporations Association, which includes Naver and Kakao, said, "With the passage of the amendment, we expect a fair app ecosystem to be created that guarantees the rights of creators and developers and allows users to enjoy a variety of content at more affordable prices."

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