SEOUL, Feb. 16 (Korea Bizwire) – Google’s app store fees could increase by more than 150 billion won (US$136 million) in South Korea due to the U.S. tech giant’s new billing policy that expands its service commission to all in-app digital content purchases, a lawmaker said Tuesday.
Last September, Google decided to make all app developers on its Play store use its billing system, which takes a 30 percent commission on digital content purchases, starting October this year.
The new policy would lead to an increase in app store fees for local developers by as much as 156.8 billion won, Park Sung-Joong, a lawmaker of the opposition People Power Party, said, citing a report by the Ministry of Science and ICT.
Sales from apps on Google’s Play store last year were estimated at over 5 trillion won, according to the ministry report that reviewed 246 companies that accounted for over 75 percent of the country’s mobile app sales during September and October last year.
Fees on applications that would be newly impacted by the billing policy reached 287.4 billion won last year.
The ministry report said such fees are estimated to rise by 156.8 billion won, or 54.5 percent, from the previous year based on the companies’ sales growth estimates this year.
If sales remain the same as last year, the fees would rise by 88.5 billion won, or 30.8 percent.
Among the surveyed companies, 35 percent said they would accept Google’s billing policy changes, while 29.9 percent said they would raise fees for users, and 27.1 percent said they would use other app stores.
Google’s move has met fierce opposition from local developers and lawmakers who argue that consumers will end up paying for the additional fees.
Last year, lawmakers proposed bills that would ban app market operators from imposing certain payment methods in mobile content transactions to limit Google’s move.
Google has said its policy update will not impact the majority of local developers and that the service fee is used to reinvest in its platform.