Quick legislation needed to curb Google's billing policy: Korean tech firms

By Chae Yun-hwan

SEOUL, March 17 (Yonhap) -- A group of major South Korean online companies called on lawmakers Wednesday to pass a bill to restrict Google's planned enforcement of its billing system, even after the U.S. tech giant decided to lower its commission rate.

Google is set to require all app developers on its Play store use its billing system, which takes a 30 percent cut for user purchases of digital goods, from October.

The move has drawn opposition from app developers that have circumvented Google's fee by using other payment systems.

Amid mounting criticism, the tech giant decided earlier this week to reduce its commission by half to 15 percent for the first US$1 million of revenue a developer earns per year starting July 1.

The Korea Internet Corporations Association, which represents major local tech companies, such as top portal operator Naver Corp. and messenger operator Kakao Corp., said Google's latest move still undermines fair competition as it forces developers to use the company's billing system.

"Google's fee reduction, which ignores the essence of the issue, is a temporary remedy," the association said in a joint statement with nine other financial and civic groups. "The National Assembly should restore fair competition in the mobile environment through revisions to the Telecommunications Business Act."

Last year, lawmakers proposed bills that would ban app market operators from enforcing certain payment methods in mobile content transactions amid growing complaints from local app developers.

Google has said that its service fee is used to reinvest in its platform and that its latest move will lead to a 50 percent reduction in fees for 99 percent of developers globally.

Lawmakers have expressed mixed reactions to Google's latest move.

Lee Won-wook, a ruling party lawmaker and the chairman of the National Assembly's Science, ICT, Broadcasting and Communications Committee, which is reviewing the bills, said in a statement that he respects Google's decision but called for more efforts from the company to ensure fairness in the market.

The U.S. tech giant's decision follows moves by rival Apple Inc., which lowered its App Store's commission by half for developers that earn up to $1 million annually from the start of this year.

Sales from apps on Google's Play store in South Korea last year were estimated at over 5 trillion won ($4.4 billion), according to a government report that reviewed 246 companies that accounted for over 75 percent of the country's mobile app sales during September and October last year.

yunhwanchae@yna.co.kr
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