South Korea’s Communications Commission has determined that Google failed to comply with the nation’s law — the first of its kind in the world — requiring app store operators to allow third-party payments.
The law came into effect in September 2021, after South Korea ruled that Google and Apple had too much power to set prices and skim fees, and therefore developers and innovation were harmed.
Google quickly agreed to comply with the law, and Apple came to the party after a few weeks of consideration.
But Google’s response saw it continue to funnel all transactions through the Play Store and charge fees for all transactions, even when users opted in to third-party payment providers.
Google has reduced the fees it charges when users choose third-party payments, but by just 4%.
As the web giant explained: “For example, where the service fee is 15% for transactions through Google Play’s billing system, it will be 11% for transactions made through an alternative billing system. .”
South Korean developers have reacted by not integrating a new payment system into their apps, but instead including links to third-party payment systems that never touch Google’s Play Store and should therefore escape everyone’s notice. fees imposed by Google.
Google considers these links to render the apps non-compliant with its payment policy.
Publishers of non-compliant apps are already blocked from releasing updates, and Google has said that starting June 1, 2022, it will remove non-compliant apps from the Play Store.
An association of Korean developers has asked the Communications Commission to examine whether Google is complying with the law. In a decision on Tuesday, the Commission answered that question in the negative.
The Commission’s reading of the relevant legislation is that anything that prevents consumers from accessing an alternative payment system is prohibited, that links embedded in payment systems are fine, and that Google’s planned removal of apps would be out of context.
The register asked Google for a comment on the matter.
Google recently announced a worldwide third-party payments experiment, starting with Spotify, but didn’t hint that its trials would be widespread or rapid. Your correspondent therefore expects Google to appeal this interpretation of South Korean law soon, as failure to do so would open the door for developers to circumvent Play Store fees entirely.
Google and Apple have argued that these fees are akin to rents paid for retail space in the real world, as they reflect the cost of operating their digital stores. If so, the two tech giants are almost certainly smart enough to devise alternative fees that help them recoup the cost of their app stores and generate profit as well. ®