Google Can’t Punish South Korean App Developers Who Offer Payment Workarounds

The Korean Communications Commission (KCC) on Tuesday (April 5) said U.S. tech behemoth Google can’t stop South Korean app developers from using payment workarounds, meaning the company loses its digital sales commission edge, according to a Wall Street Journal report Tuesday (April 5).

Google had been pushing for policy changes that would block app developers in South Korea from including an in-app link to outside websites to buy digital goods using an “outlinking” payment option that skirts Google’s fees.

Those who include external links could be removed from the Google Play Store by June 1, a breach of South Korean law, according to the KCC ruling. The commission is also planning to create a new division for local app developers to report violations later this month, the report said.

“We will work to ensure that the regulation lives up to its intentions to ensure that user choice is guaranteed,” KCC Chairman Han Sang-hyuk said in a statement.

The report noted that last year, South Korea became the first country to pass a bill fighting back against Google and Apple’s dominance over how apps on their platforms sell subscriptions, in-game items and other online content.

Google and Apple are prohibited by law from forcing apps to use their own in-app payment systems and bypassing commission rates of up to 30%.

Google didn’t have immediate comment on the KCC’s ruling, but has previously said it would still apply fees on in-app payments handled by third-party payment options that were 4 percentage points less than what it would have charged on its own payment system.

Related: Google’s ‘Dual Billing Option’ Adds Pressure on Apple

In March, Google and Spotify announced an agreement that will allow users to download Spotify from the Google Play Store and choose to pay with either Spotify’s payment system or Google Play Billing. The dual billing option will be displayed side by side in the app.

The User Choice Billing may be launched later this year in the U.S., with the companies also planning a global rollout.