The Korea Communications Commission (KCC) announced an investigation into the three major app platforms in South Korea, Google, Apple, and One Store.
The investigation was aimed at finding out whether the companies violated Korean law on mandatory use of certain apps and regulations on payment methods.
According to KCC, the investigation will begin on August 16. If the application platform only allows a certain payment method to exist or refuses to use third-party payments, that may be considered. is a violation of the amended Telecommunications Law.
In a statement, the KCC stressed: “If the results of the investigation are found to be infringing, the commission plans to prevent it through measures such as fines and requests for amendments.”
The cause of the investigation stems from a complaint received by KCC on May 17. In this complaint, many developers reported that Google forced them to use the Google Store payment system and requires removal of the third-party payment link, so Google takes a 30% cut.
A good example is Kakao. Last month, Kakao, South Korea’s largest social company, was rejected by Google for other reasons when submitting an Android update request to KakaoTalk. Kakao had to remove the third-party payment interface. In addition, Korean developers of music, web comics and e-books have also blamed Google’s mandatory payment policy for the recent rise in content prices.
Korea is the first country in the world to break the monopoly of payments on app platforms. In August last year, Korea passed the revised Telecommunications Law with a high vote, which legally requires application platforms to open third-party payment channels. Then, Google and Apple responded, respectively, stating that they would comply with local laws and would allow “apps distributed only in the Korean market to access third-party payment channels.” “.
Google and Apple can still collect 26% – 27% fee sharing from third-party payment channels. The reason is that while the Amendment prohibits application platforms from monopolizing payment channels, it does not prohibit application platforms from charging other fees, which allows Google and Apple to explain.
From Google’s point of view, 30% of the initial commission is purchased from the platform’s “construction fee” and “payment share”. While using third-party payment channels can avoid paying some of this cost, developers still incur platform-building fees. The fee is primarily used to help offset the cost of running a separate payments system for Google Play, as well as funds to “continue investing in Android and Google Play”.
Google also claims that while it takes 30% of the payment fees for apps or digital content that are actually sold in Google Play, the actual revenue it can bring to Google is only about 3% of the payment. As a result, Google doesn’t make much of a platform commission, and this roughly 3% profit corresponds to a 4% cut.