Google delays Play Store commission fee increases in South Korea after facing backlash

Google has delayed an update for its in-app purchasing policy in South Korea amid backlash from lawmakers and developers.
Written by Cho Mu-Hyun, Contributing Writer
Image: Mika Baumeister

Google has delayed the implementation of a new policy that would have seen it charge higher commission fees to South Korean developers for sales made through the Play Store. 

With the new policy, the company had planned to expand its 30% commission fee so it would be applicable to all digital content, such as local music and digital comic apps, which are popular in South Korea. Currently, Google only requires gaming apps downloaded from the Play Store in South Korea to pay the 30% commission fee for purchases that are made within apps. 

The company said it decided to postpone the policy's rollout to give developers in South Korea ample time to adapt to the new billing system. With the postponement, the US search giant said it would extend the grace period for enforcing the new in-app purchasing policy to September 30.  

The policy was initially intended to be rolled out in mid-January.

Since the policy was announced in September, Google has faced backlash from lawmakers and local developers. On Monday, 14 lawyers representing developers filed a lawsuit against Google to South Korea's Fair Trade Commission on claims that the policy change would violate local anti-trust laws. 

Meanwhile, lawmakers have proposed new legislation aimed at curbing Google's ability to enforce the policy change. In August, the Ministry of Science and ICT began a review on the impact of app store commission fees.

Google has stressed that the new policy would merely enforce its existing policy more clearly. The company said 95% of apps developed by South Korean developers were free while it earned commission fees from the remaining 5%. Out of this 5%, 98% of them were already using Google's payment system.

While Apple already charges a 30% commission for all in-app purchases in South Korea, the Android operating system is overwhelmingly popular compared to iOS in South Korea. According to market research firm Strategy Analytics, Samsung has a 72.3% market share for smartphones in South Korea, while LG has 9.6%, and Apple has just 8.9%.

Last week, Apple announced that it would reduce the commission fees on its App Store from 30% to 15% for app developers that generate less than $1 million starting next year.

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