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Starting next year, Google decided to impose a 30% commission on all apps and content sold on the Play Store, its app market. The 30% commission policy, previously limited to gaming apps, was extended to all apps, so the commission increased. As a result, there are concerns that the price of content selling applications, such as music sources and webtoons, will rise, and that the burden on small and medium-sized content developers could increase.
Through its official blog on the 28th (local time), the Google payment method (payment in the application) is mandatory for all applications distributed in the Play Store from January 20 for new applications and October 1 for existing applications next year. He said he would. On the 29th, Google Korea revealed the reason for the system change, saying: “To continue the successful business of developers and stable use of user content” at an emergency online conference for domestic journalists. Purnima Kochikar, head of global business development at Google Play, argued that “99% of applications distributed in Korea are not affected by this decision.” On this day, Google also announced that it will invest $ 100 million (about 115 billion won) over the next year to develop the Korean digital content ecosystem.
However, the national digital content industry rebelled and said: “Contrary to Google’s claims, many application developers will be affected.” So far, companies that make sources for music, videos, e-books, and webtoons have paid only about 10% of fees using external Google payment methods. Choi Seong-jin, CEO of the Korea Startup Forum, said, “The 30% commission fee is a difficult level for startups to bear.”
The overwhelming share of the Google Play Store in the domestic mobile content market makes it difficult for content companies to leave Google. According to the Federation of Korean Mobile Industry, the payment amount incurred in Google’s domestic app market last year was KRW 5,999.6 billion, with a market share of 63.4%. There are also concerns that the burden of raising rates could eventually lead to higher consumer prices. In fact, the price of applications sold in the Apple App Store, which currently applies a 30% commission to all applications, is higher than in the Google Play Store. For example, the usage fee for the Melon music service (based on unlimited listening) is 1,400 won when paid in the Google Play Store, but 15,000 won in the Apple App Store. The cost of Naver Webtoon content is 100 won per cookie (virtual currency in Naver Webtoon) for Google, but 120 won for Apple. Other digital content prices, such as Emoticons, Naver Cloud, Kakao Page, Wave, and YouTube Premium, are also more expensive at Apple. An official from a content company said: “If the Google payment method is applied, the sale price of the App Store will increase at least.” The National Assembly and related ministries have held back Google’s actions, but the effect is questionable. Related ministries, such as the Ministry of Science and ICT and the Korea Communications Commission, are reviewing the violation of the laws of the tariff policies of both companies. On the 24th of last month, the Korea Internet Business Association submitted a report to the Korean Communications Commission stating that the application of certain payment methods by Google’s US headquarters and Google Korea is a violation of the Telecommunications Companies Law. Additionally, Democratic Party lawmaker Cho Seung-rae representatively proposed a partial amendment to the Telecommunications Business Law, which regulates mandatory payments on app by app market operators.
However, it is not easy to apply national laws, since Google is an offshore company with servers abroad. An official from the National Assembly’s Commission for Communication and Dissemination of Scientific and Technological Information said: “There is a high potential for trade disputes, so effective measures are not appropriate.”
Reporter Yoo Geun-hyung [email protected]
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