Google will be violating South Korean law if it pushes through with its plan to remove apps linking out to external payment methods, the Korea Communications Commission (KCC) said in a new legal guidance. Last year, the country passed a law that requires major app stores to accept alternative payment methods, and Google readily agreed to comply: It allowed developers to offer an alternative in-app billing system to live alongside its own. The tech giant still collects a cut for payments made through that alternative billing system, though, and it’s only 4 percent lower than the commission the company collects for payments made through its own system.
If the typical service fee for a purchase is 15 percent, then Google collects 11 percent instead. For ebooks, it collects a 6 percent commission instead of 10. Korean developers weren’t happy, and as The Register and The Wall Street Journal report, they responded by linking out to third-party payment systems in order to avoid paying Google’s fees. The tech giant had already blocked them from being able to update their apps, and it warned them that their apps will be removed from the Play Store if they continue to offer external links by June 1st.
An association of developers in Korea brought the situation to KCC, asking the commission to clarify whether Google’s actions comply with the law. See, the new law is rather vaguely worded and doesn’t explicitly state if outlinking is legal or not. Based on the commission’s legal guidance, the KCC sees external links to outside payment systems as perfectly OK and that Google is violating the law by restricting updates and deleting apps that offer them.
The KCC can conduct preliminary status inspections to identify specific violations if Google removes apps linking out to external payment methods as planned. If it finds that the company truly has violated the law, then it can slap Google with a fine equivalent to up to 2 percent of its app store revenue in the country. A company spokesperson told The Journal that Google is reviewing the guidance and that it will work with local app developers to expand users’ choice.
Google recently launched a pilot program that allows participating developers like Spotify to offer their own payment method. They have to offer their own payment systems in-app, however, alongside Google Play’s. As for Apple, it recently started allowing “reader” apps such as Netflix and Spotify to link to their own websites for payment as part of a settlement with the Japan Fair Trade Commission.
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