Stepping Back in Conflict with Google
Kakao has decided to take a step back in its conflict with Google over forced in-app payment by giving up its outlink payment method. As a result, a prolonged suspension of Kakao Talk updates or the deletion of Kakao Talk application in the app market is unlikely to take place.
Kakao officials met with officials of the Korea Communications Commission (KCC) and Google on July 7 to convey the company's intention to stop the outlink payment method currently used for Kakao Talk. An outlink payment method induces users to pay outside the Google Play app. It is advantageous for app developers because they do not have to pay fees to Google.
Google has allowed in-app third-party payments since last month, but disallowed outlink payments such as the method used by Kakao. Nevertheless, Kakao has applied the outlink payment method to user of its Kakao Talk emoticon and KakaoTalk Drawer (cloud service) subscription services. In response, Google rejected the latest update of the Kakao Talk app which includes the outlink payment method. Kakao responded by providing a separate installation file (APK) for the latest update through Daum Portal since July 1.
Yet, Kakao decided to take a step back as it judged that it succeeded in bringing the issue to the attention of policymakers and it cannot expect any more gains from maintaining the outlink method, analysts say. For now, it seems to have created the room for the KCC to intervene by leaving a precedent where an app update is rejected due to Google’s in-app payment policy.
Currently, the KCC is conducting a fact-finding inspection regarding the implementation of the Act to Ban Compulsory In-App Payment. But the majority of apps are already following the in-app payment policy, so there have been no suitable damage cases. In this situation, as Kakao Talk actually suffered damage by an app review rejection, the KCC has found a case where it can examine a possible violation of the law.
In addition, Kakao seems to have considered consumer damage and business damage that can happen if updates through APK files are prolonged. Unlike updates through Google App Market, downloading and installing APK files is a cumbersome procedure for users. Concerns have also been raised that phishing scammers may use fake update APK files to deceive gullible Kakao users. This is because malicious codes disguised as Kakao Talk updates might be distributed through text or mail services.
The KCC plans to decide whether to regulate Google based on accurate facts and legal principles. Earlier, the KCC issued an authoritative interpretation that Google’s refusal to allow the outlink payment method could violate the Act to Ban Compulsory In-App Payment which stipulates that use of certain payment methods should not be forced. However, the KCC says that a clear investigation is needed to determine whether Google actually violated the act. The KCC demanded data from both Google and Kakao to look into the use of the outlink payment method and restrictions on the use of the method and applications for Kakao updates and the rejection of them.