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Google postpones Play Store commission in Korea

Lawyers gear up to file complaints against Google with FTC

Korea Fair Trade Commission Chairperson Joh Sung-wook (Yonhap)
Korea Fair Trade Commission Chairperson Joh Sung-wook (Yonhap)
Google on Monday delayed its policy to charge a 30 percent commission on payments made via the Google Play Store as South Korean app developers geared up for a legal battle against the US tech giant.

According to an online notice posted by Google in the afternoon, it pushed back its plan to enforce the obligatory in-app purchasing policy for newly registered apps to Oct. 1 from Jan. 20.

Google has recently come under fire from Korean lawmakers after it decided in September to push forward with the controversial in-app purchasing policy, which only allows the use of the company‘s own payment system that charges a 30 percent fee on all transactions made inside apps.

Earlier in the day, a team of 14 lawyers representing Korean app developers had said they would report Google to the country’s antitrust watchdog by Tuesday, saying its app market’s billing system was in violation of fair trade laws.

In a statement, the lawyers said they would report Google to the Fair Trade Commission for abusing its dominant standing in the market.

The lawyers claim Google’s in-app purchasing policy has taken away app developers’ rights to choose, and that the disproportionate transaction fee of 30 percent discouraged competition and innovation in the mobile content market.

So far the two policies have been in place only for game apps here, leaving some to circumvent the rules by using other systems, such as direct credit card payments.

Though lawyers initially planned to report Apple as well, they decided to postpone their decision after Apple said Wednesday it would reduce the standard commission on its App Store to 15 percent from 30 percent for app developers with annual profits of less than $1 million starting next year.

The lawyers, who have been bringing together plaintiffs, did not disclose names or the number of companies they are representing. The report will be submitted in the name of the Korea Internet Corporations Association and the Korea Startup Forum. KICA has about 200 members, including Korean tech giants Naver and Kakao and three major Korean game companies, Nexon, Netmarble and NCSoft, while KSF has about 1,200 startups as members.

The Google Play Store controlled 63.4 percent of the Korean app market by revenue last year, according to the Ministry of Science and ICT.

By Kim Byung-wook (kbw@heraldcorp.com)
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