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| Fair Trade Commission Chairwoman Joh Sung-wook speaks during the government audit on the antitrust agency at the National Assembly on Yeouido, Seoul, Thursday. Yonhap |
By Nam Hyun-woo
Fair Trade Commission (FTC) Chairwoman Joh Sung-wook said Thursday the antitrust agency will soon come up with an investigation plan to look into Google's practices in running its mobile operating system, including the internet giant's recent policy forcing all in-app purchases to be made via its Play Store.
During the National Assembly audit, Joh said the FTC has been investigating two cases related to allegations that Google abused the monopolistic status of its Android OS, and they will be "submitted for the commissioners' review."
She added that the FTC is also investigating whether Google's recent policy impairs fair competition by disallowing in-app purchases to be made via alternate payment platforms and thus forcing them to be made via its Play Store, which takes a 30 percent cut on all sales.
"In this industry (the platform industry), competition is not properly working," Joh said. "The FTC is investigating practices that may hamper fair competition."
Since 2016, the FTC has been investigating an allegation that Google has forced domestic smartphone manufacturers to pre-install Google apps. Also, the FTC is looking into a suspicion that Google has forced domestic game developers to roll out their products exclusively in the Google Play store.
Regarding the in-app purchase policy, Joh said she believes it will affect users, as app developers are bound to pass the 30 percent fee on to users.
On Sept. 28, Google announced that it will require all app developers on the Google Play store to use Google's own payment system, which provides the company a 30 percent cut of in-app purchases. The plan is supposed to go into effect next year, excluding other payment platforms that do not impose such a fee.
The move has been widely anticipated as a huge pressure for app developers and downstream users.
Apple has been implementing the same policy since 2011, thus Apple users have effectively been taking the brunt of the policy via generally higher app prices compared to those of Google. Google has only been applying its in-app payment system to game apps, allowing other types of apps to use their own payment systems, but the fresh policy will make all in-app purchases be paid via the Google Play.
Rep. Lee Yong-woo of the Democratic Party of Korea (DPK) said the country's Fair Trade Act defines a company with more than 50 percent market share as a dominant player and prohibits it from unfairly adjusting fees. He added that Google is a dominant player with a 64 percent market share in Korea based on volume of purchases through Google Play, thus the policy change "is tantamount to abusing its dominant status in the market."
DPK Rep. Kim Byong-wook also said "the FTC should investigate Google on its authority" because "device manufacturers and app developers are afraid of losing their ability to transact via Google and thus cannot make complaints against Google." He cited FTC data that no Korean companies have filed complaints with the FTC against Google.
Along with the debate on Google, lawmakers demanded Naver founder Lee Hae-jin appear at the audit, in regards to the FTC's recent punishment for the domestic search engine giant's manipulation of shopping service search algorithms.
On Tuesday, the FTC fined Naver 26.7 billion won ($23 million) for manipulating its shopping and video services search algorithms to place its own services at the top of search results.
During the audit, Rep. Sung Il-jong of the People Power Party asked Joh if Naver can manipulate its search algorithms in services other than shopping, and Joh said she believes so.
Sung claimed Naver is able to "manipulate the search results of news content," but Joh said the FTC only looked into allegations regarding the Fair Trade Act.
Regarding the pending review on the acquisition deal between food delivery apps Baedal Minjok and Yogiyo, Joh said she hopes for the case to be wrapped up within this year. The two are the dominant players with more than a 90 percent market share combined.
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