Regulatory policy

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

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

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

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

Non-compliant apps will not be able to offer updates and will eventually be removed from the Google Play Store starting June 1, Google said.

Many app developers around the world have used another in-app billing system or directed users to an external link for payment to circumvent Google’s billing policy that drastically reduces in-app purchases from 15 to 30%, reports the Yonhap news agency.

Last year, South Korea passed a law that prohibits dominant app store developers, such as Google and Apple, from forcing app developers to use their payment systems, in a landmark move aimed at curb the dominance of big global tech companies.

With the current law, developers with users in South Korea have the option of offering their own in-app billing system. But they still have to remove external links for payment.

Many app operators, who used these external links to circumvent Google’s policy, have recently increased their subscription fees, rather than establishing their own payment system, which would cost them money.

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

Other major entertainment platforms, such as Wavve, are considering the same measure. The KCC is investigating whether Google’s new policy violated antitrust rules by hindering app developers’ ability to compete fairly and forcing them to follow Google’s rules given its market dominance.