South Korea’s Fair Trade Commission (FTC) said on Thursday that it would initiate a probe into Google over its supposed anti-competitive practice of enforcing 30 percent commission fees for in-app purchases made through its Play Store.
The U.S.-based tech giant came under inspection from antitrust regulators after it changed is in-app policy last month, making all apps on the Play Store to follow its new billing system. Under the policy, which would take effect after a year, Google would take a commission of 30 percent on all purchases made on its mobile platform.
The announcement made at the end of September receives opposition from app developers, saying that the move violates local fair trade and telecommunications laws.
Restoring Fair Competition in the Industry
During the National Assembly’s audit of the FTC, Joh Sung-wook, FTC’s chairperson said that Google’s policy would eventually affect the end-users. Joh added that the Monopoly Regulation and Fair Trade Act could apply in such cases where a “dominant player undermines fair competitions.”
Joh believes that reviewing anti-competitive practices would restore the industry’s fair competition.
According to the Korea Mobile Internet Business Association, Google currently holds the lion’s share in local app store sales, with 63.4 percent of last year’s total at 6 trillion won ($5 billion).
Korea Communications Commission (KCC) head Han Sang-hyuk agreed with Joh’ concerns, calling for cooperation between local agencies to address the issue. In a separate investigation, he added that the government needs to monitor the response from other countries to handle the situation better.
Meanwhile, Google responded to the growing unease by establishing a 115 billion won ($100 million) support fund for local users and app developers. Additionally, the company argued that it would commit to an open system by offering other app stores on its Android platform, which would comply with local laws.
In an opening remark, Joh said that the FTC would need to restructure e-commerce platforms’ legal responsibilities. She believes that the overhaul would prepare the ground for fair trade and collaborations in the digital ecosystem.
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