By Sagar V. Mankar Small and medium-sized game companies in South Korea are preparing to take legal action against Google and Apple due to the high fees these tech giants charge for in-app purchases. These companies, harmed by what they describe as “fee gouging,” plan to file class arbitration in a U.S. court. The issue arises because Google and Apple require developers to use their own payment systems, which deducts a 30% commission on every transaction made through their apps. This practice has been criticized in both the U.S. and Europe, where recent rulings have labeled it “monopolistic.”
South Korean companies are using these rulings as a basis to seek reduced commissions and compensation for damages. According to a report from The Chosun Daily, 29 South Korean game companies are currently preparing for this class arbitration. Class arbitration is a legal process that allows multiple parties with similar complaints to come together and resolve their disputes through mediation. In this case, the companies want to lower the 30% commission to below 15% and seek financial compensation for the losses they’ve incurred due to these high fees.
The arbitration will be filed in a California court, as both Google and Apple have their headquarters there. Lee Young-ki, a lawyer representing the game companies from the firm WeThePeople, believes the U.S. court’s past decisions could help strengthen the South Korean companies’ case. He noted that previous rulings have already identified the in-app payment systems used by Google and Apple as monopolistic. As a result, there is a strong possibility that the court will rule in favor of the South Korean companies.
In a similar case last year, a U.S. jury ruled that Google’s in-app payment system violated antitrust laws in markets outside of China. Apple also faced legal challenges when its restrictions on alternative payment methods were found to violate California’s Unfair Competition Law (UCL).