Google under fire for coercing 'in-app billing' policy
Global tech giant Google has taken flak for adopting its "in-app billing" policy, designed to force app operators to use its own payment system, so they have to pay up to 30 percent of their entire sales in commissions. Google said it would remove apps from its Play Store that don't comply with the policy. This move is prompting major domestic app developers to raise the charges on their own service users to offset the prospective losses.
Google deserves criticism for exercising its dominant status on the app market, making customers bear the brunt as a result. Google now accounts for a 70-percent share of the world's app market. Wary of the adverse impact, the nation's National Assembly passed the Telecommunications Business Act last September, a move acclaimed as the world's first bid to contain the unilateral in-app payment policies of Google and Apple.
As a follow-up measure, the Cabinet also endorsed a revised bill in March to prevent app store operators from coercing developers to use their own in-app billing systems. Yet, Google adroitly circumvented such regulations, urging clients to use either its own in-app billing system or an external one via its own system. As the latter option charges a 26 percent commission, it is almost the same as adopting Google's in-app billing system for the app users, as they must pay additional commissions to the external billing agencies.
The Korea Communications Commission (KCC) has embarked on investigations into the Google case, determining whether it violates the enforcement decree. "Though Google claims it is offering two options regarding the billing system, it has not provided sufficient choices for the developers," a KCC official said. Rep. Cho Seung-rae of the main opposition Democratic Party of Korea criticized Google for "destroying the mobile ecosystem with its excessive greed and challenging Korea's domestic law and order." Korea's major over-the-top media streaming apps such as Wavve and Tving have hiked their prices on Google Play Store to 9,000 won ($7.25) from 7,900 won.
According to the office of Rep. Kim Yeung-shik of the ruling People Power Party, the domestic app developers will have to pay 833.1 billion won in commissions per year following Google's move, and domestic consumers will have to pay an additional 230 billion won every year. Worse still, Google's decision will also likely dampen the activities of app developers and creators.
Prohibiting in-app billing systems is becoming a global trend, gaining momentum in many countries such as the Netherlands. The European country has been imposing penalties on Apple's in-app payment system since early this year, obtaining concessions from the company. The EU is also seeking to ban the system next year. The KCS should take stricter measures against Google's recent move, which seems to violate domestic laws.
Global tech giant Google has taken flak for adopting its "in-app billing" policy, designed to force app operators to use its own payment system, so they have to pay up to 30 percent of their entire sales in commissions. Google said it would remove apps from its Play Store that don't comply with the policy. This move is prompting major domestic app developers to raise the charges on their own service users to offset the prospective losses.
Google deserves criticism for exercising its dominant status on the app market, making customers bear the brunt as a result. Google now accounts for a 70-percent share of the world's app market. Wary of the adverse impact, the nation's National Assembly passed the Telecommunications Business Act last September, a move acclaimed as the world's first bid to contain the unilateral in-app payment policies of Google and Apple.
As a follow-up measure, the Cabinet also endorsed a revised bill in March to prevent app store operators from coercing developers to use their own in-app billing systems. Yet, Google adroitly circumvented such regulations, urging clients to use either its own in-app billing system or an external one via its own system. As the latter option charges a 26 percent commission, it is almost the same as adopting Google's in-app billing system for the app users, as they must pay additional commissions to the external billing agencies.
The Korea Communications Commission (KCC) has embarked on investigations into the Google case, determining whether it violates the enforcement decree. "Though Google claims it is offering two options regarding the billing system, it has not provided sufficient choices for the developers," a KCC official said. Rep. Cho Seung-rae of the main opposition Democratic Party of Korea criticized Google for "destroying the mobile ecosystem with its excessive greed and challenging Korea's domestic law and order." Korea's major over-the-top media streaming apps such as Wavve and Tving have hiked their prices on Google Play Store to 9,000 won ($7.25) from 7,900 won.
According to the office of Rep. Kim Yeung-shik of the ruling People Power Party, the domestic app developers will have to pay 833.1 billion won in commissions per year following Google's move, and domestic consumers will have to pay an additional 230 billion won every year. Worse still, Google's decision will also likely dampen the activities of app developers and creators.
Prohibiting in-app billing systems is becoming a global trend, gaining momentum in many countries such as the Netherlands. The European country has been imposing penalties on Apple's in-app payment system since early this year, obtaining concessions from the company. The EU is also seeking to ban the system next year. The KCS should take stricter measures against Google's recent move, which seems to violate domestic laws.
