Gadgets & apps

Google Play’s new billing policy might violate South Korean law

Why no links, Google?

Flickr/Aranami

South Korea will likely push Google to remove certain clauses from its new billing system policy — specifically the one that requires developers to take off external links to purchase digital goods.

The search giant’s new policy for in-app payments on the Play Store came into effect on April 1. It requires developers to mandatorily use the company’s own billing system.

What’s more, apps can’t use external links or promotional text to tell users about their paid plans within the UI.

The new rules state that if these conditions are not followed, developers won’t be allowed to update their apps, starting this month. And, by June 1, Google will start removing non-compliant apps from the Play Store.

According to a report from the Wall Street Journal, the Korea Communications Commission (KCC) said that this new policy will breach the country’s new in-app payment law.

The law, which was passed last year, requires Apple and Google to allow developers to use alternative payment methods for digital goods purchases in their app stores.

However, the KCC finalized the details of it just last month.

“We will work to ensure that the regulation lives up to its intentions to ensure that user choice is guaranteed,” said Han Sang-hyuk, the KCC chairman. He added that the government body also plans to create a framework for local developers to report breaches of the new law.

Google responded to KCC’s statement by saying it’s working with developers to expand user choice in Korea:

We have just been made aware of the KCC’s latest press release and are reviewing it. We continue to work closely with our developer community to evolve the Android ecosystem and expand user choice in Korea, while continuing to ensure we can invest in the ecosystem and provide a safe and high quality experience for all.

There’s not much to parse, eh?

WSJ’s report notes that if Google removes non-compliant apps, the KCC could open up an investigation and punish the company with a fine of 2% of Play Store’s South Korea revenue for the period of violation.

Now, Google might not be losing any sleep over that number, but it would want to appease regulators — and avoid stricter rules in the future.

The big G takes a commission for in-app purchases, this ranges from 10% to 30% depending on the category of the app.

To comply with the new law, the company has allowed South Korean developers to implement alternative payment systems. And it’ll take a cut from the app that’s 4% less if a user chooses a third-party payment method.

South Korea is not the only country where regulators are looking at in-app payment systems and app distribution. Lawmakers in the US, EU, and India are also investigating potential monopolistic practices of these app stores.

To pre-empt the possibility of change in payment models through regulations, Google announced a deal with Spotify last month to experiment with alternative payment systems — but details on that are bare.

All we know for sure is that this rigmarole isn’t ending anytime soon.

Published April 6, 2022 - 12:21 pm UTC

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