A month before Google’s ‘forced in-app payment’… OTT and music streaming users pay hundreds of billions of additional dollars annually
As Google enforces in-app payment despite the recent enforcement of the ‘Enforcement Prohibition of In-App Payment Act (Revised Telecommunication Business Act)’, domestic OTT (video real-time playback) and music streaming (real-time playback) services are expected to increase their rates. As a result, it is analyzed that consumers will have to bear hundreds of billions of dollars more annually.
On the 3rd, Yang Jeong-sook, a member of the National Assembly’s Science, Technology, Information and Broadcasting Committee, announced the results of his own analysis of the increase amount and the annual additional burden of consumers for domestic OTT and music streaming services that have already raised or plan to increase rates.
As a result of the analysis, it was found that 12.55 million monthly active users (MAU) of music streaming services such as Melon, Flo, and Genie Music, as well as OTT services such as Wave and Teabing, have to pay an additional fee of up to 230 billion won per year. Assemblyman Yang made this estimate assuming that Melon and Flo would raise their rates by applying a 14.7% increase to the standard rate plan (10,900 won per month).
In the case of OTT, Wave and Teabing increased the price of the ticket applied to payment through the Android app by 14.7% on the 1st of last month. Music streaming services such as Melon, Genie Music, Wave, and Season have also announced rate hikes.
Previously, Google required that the update to delete the outlink to the external payment page for apps registered in Google Play be completed by April 1 of this year, and if not followed, the app will be deleted from Google Play from June 1. has been announced Accordingly, content companies explain that when using Google In-App Payment, a 15% fee applied to subscription-type services must be paid to Google, so a rate increase is inevitable. “After June, there is a possibility that rates for content services in other fields will also increase, which will further increase the burden on consumers.”
Previously, according to the Office of the People’s Strength Secretariat under the National Assembly’s overdefense, Kim Young-sik, the non-game content developer paid up to 833.1 billion won in fees to Google this year due to Google’s enforcement of the in-app payment compulsory policy. As before, if various payment methods are allowed, the calculated fee is 419.3 billion won. In other words, the difference of 413.8 billion won will go to Google.
In Korea, the ‘law to ban forced in-app payments’, which was passed by the National Assembly for the first time in the world last year, is already in effect, but Google is in fact maintaining its policy with only formal alternatives. If you do not follow the in-app purchase policy, from April 1st, app developers will not be able to submit updates, except to address important security issues. After June 1, it will be removed from the Play Store altogether. It is difficult for Korean app companies to compete with Google, which holds a 76.8% market share as of 2021.
In response to Google’s tyranny, the National Assembly took additional measures. Rep. Yang Jeong-sook is planning to propose a bill to amend the Telecommunications Business Act to increase the competitiveness of One Store, a native app market, to keep Google in check. This includes a clause that ‘If mobile content is registered in one app market, it is recommended to register it in another app market under fair and reasonable conditions’.
“This kind of problem occurs because Google and Apple, which have completely dominated the smartphone OS market, are exercising their influence by controlling the app market as well,” said Representative Yang. “The only fundamental solution is to activate market competition.” pointed out
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