SEOUL, March 15 (Korea Bizwire) – The South Korean unit of Google Inc. has decided to lower its planned commission rate for app developers, parliamentary and industry sources said Monday, amid complaints from software makers over steep fees.
Google Korea reported to parliament’s committee on science and technology that it will cut the 30 percent rate on in-app purchases to 15 percent for app developers whose annual sales generated from its Play store are less than US$1 million, according to the sources.
The new policy will take effect in July.
A company official said 99 percent of developers log less than $1 million annual revenue on the Play store.
Google earlier announced a plan to introduce the 30 percent commission to all in-app digital goods purchases in South Korea while making it mandatory to use its own payment system for app purchases on its platform, starting January 2021.
The new billing policy caused fierce opposition from tech firms and politicians and the company later delayed its implementation to September.
Last year lawmakers proposed bills that would ban app market operators from imposing certain payment methods in mobile content transactions.
The tech giant has said that the service fee is crucial to reinvest in its platform.
“We will do our best so that South Korean developers can provide their products and services to over 1 billion users from some 300 countries around the world and achieve success in the global market,” a Google official said.
Sales from apps on Google’s Play store last year were estimated at over 5 trillion won ($4.4 billion), according to a government report that reviewed 246 companies that accounted for over 75 percent of the country’s mobile app sales during September and October last year.