GOOGLE'S IN-APP PURCHASE FEES

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Buying additional content or services within an app when playing a mobile game or watching a webtoon is called an "in-app purchase.“ Last year, Google announced it will only allow in-app purchases and even charge a 30 percent fee. Facing crticism, Google has taken a step back saying it will lower that fee to 15% for certain contents, but it doesn’t appear enough to subdue the backlash from Korea’s online sector.

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This is a notice posted on a Google developers blog. It reads that the fee charged on in-app purchases of video, audio and book contents will be lowered to 15%. It’s a shift from Google’s earlier plan to charge a 30% fee on ALL contents starting October. The lower commission is certainly less of a burden on developers in the aforementioned areas, but resistance to the billing policy continues.

[Soundbite] Seo Beom-gang(Chair, Korea Webtoon Industry Association) : "Developers can merely abide by the Google-determined framework and ultimately the entire app store market will be placed under its control."

The dispute first began when the tech giant announced last year its in-app purchase policy to take effect from this year. In addition, a 30% charge on all app developers, the same level as Apple’s, has infuriated local venture companies, prompting them to file a petition with the Fair Trade Commission. Amid the backlash, Google delayed the effectuation of the new policy to October this year and also offered to lower the commission to half for content sales of up to 1.1. billion won. But Google is steadfast on the plan to mandate in-app purchases only, citing security of user information. Critics say the fees charged on app developers may eventually be passed on to consumers.

[Soundbite] Jo Seoung-lae(Nat’l Assembly Science, ICT, Broadcasting and Communications Committee) : "In-app purchase mandate and higher commission will inevitably raise user fees on accessing content."

One study shows that if in-app purchases become mandatory, it can reduce annual sales of the local content sector by more than 2 trillion won. The National Assembly’s ICT and Communications Committee on Thursday referred a bill on preventing Google from abusing its market dominant status to a subcommittee that coordinates legislative items disputed between rival parties. If the bill is approved there, it will be put to a vote within 30 days.