South Korean regulator to rule on Google’s new billing policy

Seoul: South Korea’s telecommunications regulator on Friday said it was looking into whether Google’s new payment system violates the law that bans app store operators from forcing developers to use their in-app payment systems.

“We are reviewing the matter and will announce the result and response early next week,” an official from the Korea Communications Commission (KCC) said.

Starting Friday, all app developers selling digital goods and services in Google Play are required to use Google’s billing system and to remove external payment links.

Non-complying apps will not be able to offer updates, and will ultimately be removed from the Google Play store starting June 1, Google said.

Many app developers around the world have used an alternative in-app billing system or directed users to an external link for payment to circumvent Google’s billing policy that takes a hefty 15-30 per cent cut of in-app purchases, reports Yonhap news agency.

Last year, South Korea passed a law that bars dominant app store developers, like Google and Apple, from forcing app developers to use their payment systems, in a landmark decision to curb the dominance of global big tech companies.

With the law in effect, developers with users in South Korea are allowed to have the option to offer its own in-app billing system. But they still need to delete external links for payment.

Many app operators, which have used such external links to bypass the Google policy, have recently raised their subscription fees, rather than establishing their own payment system, which would cost them money.

Music app Flo raised its monthly subscription fees by 14 per cent and streaming platform Tving increased fees by 15 per cent.

Other major entertainment platforms, such as Wavve, are considering the same measure. The KCC is looking into whether Google’s new policy violated antitrust rules by hampering app developers’ ability to compete in a fair manner and forcing them to play by Google’s rules given its market dominance.