South Korea asks Google to cut commission for app market purchases

A group of South Korean lawmakers has asked Google to lower its commission for app market purchases amid concerns of local app developers over high fees.
Google South KoreaGoogle rival Apple announced a day earlier it will reduce the standard commission on its App Store from 30 percent to 15 percent for app developers with yearly proceeds of less than US$1 million from next year.

“Apple’s policy to halve its commission is well-timed,” seven lawmakers of the main opposition People Power Party in a joint statement, Yonhap news agency reported.

“We urge Google to reduce its commission for small app developers to below 15 percent to boost South Korea’s app ecosystem.”

Google has recently come under scrutiny from South Korea’s lawmakers after it decided in September to make all app developers on its Play store use its billing system, which takes a 30 percent commission on all digital content purchases, from October next year.

Lawmakers have proposed bills to limit Google’s move that would ban app market operators from imposing certain payment methods in mobile content transactions.

Local tech groups have voiced strong opposition against Google’s move, worrying about higher fees.

“Google and Apple’s policies to force in-app payments negatively impact not only startups but also the broader content industry,” the Korea Startup Forum said in a statement last week. “We urge a swift passing of the bill that would restrict unfair activities by app market operators.”

Google has downplayed the concerns, with Im Jae-hyun, a director at Google Korea, telling lawmakers in a parliamentary audit last month that less than 100 local developers would be affected by the change.

South Korea’s regulators have nevertheless taken aim at Google, with the Korea Fair Trade Commission currently looking into whether Google’s policy change violates competition laws.

Google’s app market sales in South Korea reached 6 trillion won ($5.4 billion) last year, or 63.4 percent of the country’s total, compared with Apple’s App Store with a 24.4 percent stake, according to the Korea Mobile Internet Business Association.