Kakao falls victim to Google's in-app payment policy

Kakao's logo is seen in its offices in Seongnam, Gyeonggi Province. Courtesy of Kakao

By Park Jae-hyuk

Google has banned Kakao from offering the latest version of KakaoTalk on the Google Play Store, as the Korean firm refused to follow the U.S. company's in-app payment policy, which has been in effect since last month.

According to Kakao, the 9.8.6 version of its mobile messenger app has been unavailable on Google's app market, since the newest version's release on June 30. Google Play Store was only allowing its users to download the previous 9.8.0 version as of Tuesday.

"Google rejected the review of the latest version of KakaoTalk, citing our non-compliance with its policy," a Kakao official said.

The American tech giant has forced app developers here to use either its own billing system, charging a 30-percent commission or alternative payment options charging a 26-percent commission, in an apparent attempt to circumvent domestic regulations. Korean law mandates that apps distributed by app market operators be allowed to offer an alternative payment processing option within their apps.

At the same time, Google has threatened to remove apps on the Google Play Store if the developers of those apps direct their users to external systems for payment, whereby they are not liable for the commissions taken by the U.S. firm. This move has raised criticism from content providers and politicians, concerned about the possibility of app developers shifting higher costs onto consumers. Some civic groups even reported Google's top executives to the police last month.

The logo of Google is seen on the window of Google for Startups Campus in Seoul in this 2021 file photo. Yonhap

Despite the threat from Google, Kakao has continuously directed its users to external payment systems for them to buy emoticons for lower prices. In response to Google's ban on its latest version, the Korean firm has guided KakaoTalk users on how to download the new version from its official website. The company also explained that the latest version is available on the Apple App Store and One Store.

However, there remains the possibility that Google could eventually kick KakaoTalk off of its app market, given that Kakao has continued to direct its users to external payment systems.

Rep. Cho Seung-rae of the main opposition Democratic Party of Korea urged the Korea Communications Commission to sanction Google as soon as possible, although Kakao said it does not have plans yet to file any complaint with the media regulatory agency. The regulator has reiterated that it has looked into the dispute thoroughly.

The Korea Times asked for Google Korea's comment on this issue through its PR agency, but the company did not respond.

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