Google In-App Payment Mandate Causes Additional 230 Billion Won Customer Burden... Calls for Checks Increase

OTT and Music Streaming Price Increase
Estimated Additional Consumer Burden of 230 Billion KRW
Entire Share Goes to Google
Assemblywoman Yang Jeongsuk Supports Domestic Content Apps' Entry into Multiple App Markets to Disperse Google's Market Share

[Image source=Yonhap News]

[Asia Economy Reporter Cha Min-young] Google’s enforcement of in-app payments, ignoring the 'In-App Payment Mandate Prohibition Act,' has led to an estimated additional consumer burden of approximately 230 billion KRW from online video services (OTT) and music streaming usage. Calls have resurfaced to curb Google, which holds a domestic market share in the 70% range, by providing incentives to encourage domestic mobile applications (apps) to flow into alternative app markets.

OTT and Music Streaming Price Hikes... Customer Burden Increases by 230 Billion KRW

According to the office of Representative Yang Jeong-suk of the National Assembly’s Science, Technology, Information and Broadcasting Committee on the 3rd, prices for a total of eight mobile content services?three domestic OTT services and five music streaming services?have increased by 14.7% to 20% or are about to increase. The resulting additional consumer burden is estimated at 230 billion KRW.

Earlier, the office of Kim Young-sik, the senior member of the People Power Party on the same committee, made similar remarks. According to Kim Young-sik’s office, due to Google’s enforcement of the in-app payment mandate policy, the commission paid by non-game content developers to Google this year reached up to 833.1 billion KRW. If various payment methods were allowed as before, the calculated commission would be 419.3 billion KRW. The difference of 413.8 billion KRW goes entirely to Google.

Domestically, the world’s first In-App Payment Mandate Prohibition Act passed by the National Assembly last year is already in effect, but Google has only presented formal alternatives while effectively maintaining its policy. If app developers do not comply with the in-app payment policy, from April 1, they will be unable to submit updates except for cases addressing critical security issues. After June 1, they will be completely removed from the Play Store. Domestic app companies find it difficult to fight against Google, which held a 76.8% market share as of 2021.

Encouraging Alternative App Markets to Increase Inflow of Mobile Content Companies

The National Assembly has also begun preparing additional measures against Google’s tactics. Representative Yang Jeong-suk plans to propose an amendment to the Telecommunications Business Act to strengthen the competitiveness of the native app market One Store as a means to curb Google. This amendment includes a clause recommending that when mobile content is registered on one app market, it should also be registered on other app markets under fair and reasonable conditions.

This is similar in intent to the 'Telecommunications Business Act Amendment' centered on the 'Content Equal Access Right,' originally introduced by Representative Han Jun-ho of the Democratic Party of Korea in 2020. Han Jun-ho’s bill was ultimately excluded from the National Assembly discussions among the bills related to the In-App Payment Mandate Prohibition Act proposed last year. Criticism was raised that the cost burden for small and medium app developers to release apps on multiple app markets is high and limits corporate choice.

Representative Yang’s office explained that the plan to have apps registered on multiple app markets differs in that it replaces the 'mandatory' clause with a 'recommendation.' If accepted, the Minister of Science and ICT would focus on providing incentives and necessary support to mobile content providers. Additionally, the bill includes establishing a mobile content distribution council involving app market operators and mobile content providers.

Representative Yang said, "To activate effective competition in the domestic app market, it is necessary for the government to actively recommend that major mobile content providers register their content on other app markets as well," adding, "I plan to soon propose a bill that supports the government’s recommendation and mobile content service providers who comply with it."

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