Kakao to delete chap app outlink in line with Google policy, KCC to probe Google

[Graphics by Song Ji-yoon]

South Korea’s largest chat platform operator Kakao Corp. will remove outlink for recurring payment in KakaoTalk app in a reconciliatory gesture before asking Google to re-allow updates of KakaoTalk while Korean authority probes whether the multinational violated any local rules.

The Korea Communications Commission (KCC) is preparing to initiate a fact-finding investigation to study whether an administrative action is needed for Google’s ban on app developers’ use of outlink for processing in-app purchases.

According to IT industry and government sources on Wednesday, Kakao took a step back in its deepening conflict over in-app payment with Google by giving up its outlink for digital payment in KakaoTalk app and decided to file an approval to its latest updates with Google Play Store.

Korea passed a law to prohibit app store operators like Google and Apple from forcing app developers to use their own payment systems. But to evade the law, Google in April announced new guidelines to encourage app developers to use its own billing system using outlink at a discount in fees.

Kakao then introduced own digital payment platform where it does not pay any fees to Google, and Google in retaliation has prevented the latest updates of KakaoTalk on its app market.

The KCC last week mediated between Kakao and Google to little avail. Kakao promised efforts for user convenience, flagging the possibility of deleting own platform.

During the mediation, the KCC notified Google that rejecting releases of app updates due to its payment outlink policy could be in violation of local laws. It is closely studying whether Google’s ban on app developers’ use of outlink, forcing of its own payment system and denial of app approval fall afoul with Korean rules.

The regulator is planning to quickly complete the study and initiate a fact-finding investigation. If detailed illegalities are found, Google will be facing appropriate penalties like fines, corrective orders and improvement recommendation.

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