South Korean app developers denounce Google's 30 percent fee

A logo of Google is seen at an office building in Zurich, Switzerland July 1, 2020. REUTERS-Yonhap

Google Inc. faced strong backlash from South Korean developers after it announced Monday (U.S. time) it will enforce its app market's billing system, which charges a 30 percent fee to all app developers.

While Google has taken a 30 percent cut for all in-app purchases on the Play store through its billing system, some apps have circumvented the rule by using other methods, such as direct credit card payments.

"We have clarified the language in our payments policy to be more explicit that all developers selling digital goods in their apps are required to use Google Play's billing system," Google said in the post, adding it would give app developers a one-year grace period to adopt the system, while it will start enforcing the billing system on the Play store's new apps Jan. 20.

Google said in the post the policy change will not affect the majority of app developers as nearly 97 percent already use Play's billing system.

The move has prompted an outcry from South Korean app developers that worry it will harm the local app industry.

Last month, even before Google's official announcement, the Korea Internet Corporations Association, which represents major local tech companies, such as top portal operator Naver Corp., requested the country's telecommunications regulator, the Korea Communications Commission (KCC), to look into the then purported policy changes.

The group argued the move would lead to more fees on app users and further solidify the dominance of Google, which holds a strong grip on the local app market.

Google's Play Store held a 63.4 percent share of total app store sales in the country last year at 6 trillion won (US$5 billion), compared with Apple's App Store with a 24.4 percent stake at 2.3 trillion won, according to the Korea Mobile Internet Business Association.

Local app developers have also argued that Google's move could be in violation of local telecommunications rules that prohibit unfair restrictions for users choosing services.

Han Sang-hyuck, the chairman of the KCC, told lawmakers earlier this month that he views Google's enforcement of its billing system as a violation but is currently reviewing the matter. (Yonhap)

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