Electronic store

Google Korea registers W292b in sales without transaction fees on the App Store

A Google sign on the is displayed at the company’s campus in Mountain View, Calif., Sept. 24, 2019. (AP-Yonhap)

Amid ongoing controversy over Google’s new in-app payment policy, Google Korea saw sales of 292 billion won ($237 million) year-on-year, up 32 .8% year on year – but this does not include the App Store Play commission, estimated to be billions of won.

According to the regulatory filing submitted Thursday by the Korean branch of the global IT giant, Google Korea’s operating profit recorded 29.4 billion won, up 88.4 percent year on year, while its profit net rose 152.1% from a year earlier to 15.6 billion won.

However, the figures reported by Google Korea did not include any revenue from transaction fees made in the Google Play App Store, as its server is located in Singapore.

The Korea Mobile Internet Business Association, an advocacy group, estimates total commission revenue from Korean sales in the Google Play app market is around 5 trillion won. During the National Assembly’s state audit in October 2020, a Google Korea official said that Google Play’s app market fee was estimated at around 1.4 trillion won, referring to the Data.ai data analyzer, then known as App Annie.

Although Google Korea paid corporate taxes of 13.8 billion won last year, it didn’t have to pay anything here out of the revenue it raked in from embedded payment fees here. According to KPMG’s corporate tax rate table, the corporate tax rate in Korea was 25% while it was 17% for Singapore in 2021.

Commission revenue is expected to rise further in June, after Google implemented a policy requiring app developers selling in-app digital goods and services to use its payment system, with Google charging a 15-30% commission.

Meanwhile, the fight between the Korea Communications Commission and Google continued even after representatives of the two sides met to resolve disputes over policy.

Han Sang-hyuk, chairman of the KCC, spoke to Wilson White, head of government affairs and public policy at Google, on Tuesday at the request of the global IT company.

During the meeting, White said Google recognizes that some app developers do not welcome Google’s new in-app billing policy, adding that it will communicate more actively with the KCC to comply with the revised Telecommunications Business Act.

But Han replied that Google’s new measures did not fully reflect the purpose of the legislation.

“In particular, if there is an act that actually forces in-app payments by limiting outbound web payment links, it could be against the law,” Han said.

The KCC chief added that despite the regulator’s judgment, if Google forces in-app payment compliance by blocking updates or removing apps that use different payment methods, it will take action in accordance with the regulations.

After Google announced the implementation plan for its new in-app payment policy, under which non-compliant apps will be removed from Google Play starting June 1, Korean online streaming service providers, such as Tving and Wavve, have increased their subscription fees by around 15 percent as a preventative measure.

The Korea Publishers Association has filed a lawsuit with the KCC against Google for violating the law, saying that app developers will be hit with payment fees they didn’t have to pay before and that they will eventually be imposed on consumers with an increase in the prices of digital content. .

By Kan Hyeong-woo ([email protected])