S Korea launches probe into Google over Play Store violations

The US tech giant has come under intense scrutiny from South Korean regulators along with Indian app developers and entrepreneurs after it updated its global policy late last month to make all apps on its Play store use its proprietary billing system.

Seoul/New Delhi: South Korea has launched an antitrust investigation into Google over its plans to enforce commission fees for in-app purchases made through its mobile application store.

The US tech giant has come under intense scrutiny from South Korean regulators along with Indian app developers and entrepreneurs after it updated its global policy late last month to make all apps on its Play store use its proprietary billing system.

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Under the new policy set to take effect in October next year, Google will take a 30 percent commission on all digital purchases by consumers.

South Korean app developers have voiced strong opposition against the move, arguing that it could be in violation of local fair trade and telecommunications laws, reports Yonhap news agency.

Joh Sung-wook, chairperson of the Korea Fair Trade Commission (KFTC), told lawmakers during a parliamentary audit that Google’s plan is currently being reviewed.

“I believe that competition isn’t working properly in this industry,” she said. “In order to restore competition, we are currently investigating for anti-competitive actions.”

Google holds a tight grip over local app store sales, with a 63.4 percent share of the total last year at $5 billion, according to the Korea Mobile Internet Business Association.

Han Sang-hyuk, head of the Korea Communications Commission, echoed Joh’s concerns, and called for inter-agency cooperation over the issue.

“We need to monitor the response from other countries and also create a structure for cooperation between local agencies,” Han told lawmakers in a separate audit.

The country’s telecommunications regulator is conducting a separate investigation into Google over its in-app payment policy.

Google has argued that it is committed to an open system by offering other app stores on its Android platform and that it will comply with local laws.

In response to growing frustration, Google has established a support fund worth $100 million for local app developers and users.

Amid growing scrutiny over Google’s app store fees, local rival One Store, under the country’s top mobile carrier SK Telecom Co., said it would exempt in-app payment fees by 50 percent for app developers with monthly transactions of less than 5 million won until the end of next year.

In India, Google faced criticism from developers after it announced its policy asking them to integrate with the Play Store billing system.

However, Google said it has extended the time for developers in India who use alternative payment system, to integrate with the Play Store billing system till March 31, 2022.

Targeting Google’s dominance in the app distribution space in India, leading digital payments platform Paytm on Thursday said it is setting up a Rs 10 crore fund as equity investments for mini app developers in the country.

The move, announced at a mini apps developer conference, comes after Paytm launched an Android Mini App Store earlier this week to support local developers.

Paytm claimed that over 5,000 developers from across the country expressed their interest in being a part of the Paytm Mini App programme.

Several Indian entrepreneurs came out in support of Paytm’s initiative.

“Google’s tax is like a distributor asking for 30 per cent of the sales revenue as a cut. Today, we are all at the mercy of Google. We don’t know when they will remove the apps, based on some policy that they decide,” Murugavel Janakiraman, Founder & CEO, Matrimony.com, said in a statement.