The Squeeze on Indie Developers: A David vs. Goliath Battle

Four South Korean small and medium-sized mobile game companies, backed by the Citizens’ Union of Economic Justice, have publicly challenged the in-app payment policies of Apple and Google, which dominate over 90% of the global app market. During a press conference held in Seoul, thes developers voiced their concerns, stating that the tech giants’ policies are stifling innovation and threatening the survival of smaller players in the domestic game industry.

The developers, wary of potential retaliation from Google and Apple, chose to remain anonymous, with some only presenting their cases without revealing their identities. This highlights the power imbalance and the fear that these companies wield over smaller developers who rely on their platforms for distribution.

In-App Payment Policies: A Necessary Evil or Exploitative Practice?

The core of the dispute lies in the mandatory use of Apple and google’s proprietary payment systems for all digital goods and services sold within their respective app stores. This “in-app payment” system requires developers to pay a commission, typically ranging from 15% to 30%, on every transaction. While apple and Google argue that these fees are necessary to maintain the app stores and provide a secure platform for users, developers contend that they are excessive and unsustainable, especially for smaller businesses.

one developer lamented:

Even after generating sales, over half of the revenue is lost to in-app payment fees and marketing expenses.

Another shared a frustrating experience:

I launched a game service, but payments from the Google App Store suddenly stopped. Contacting customer support proved futile, with representatives repeatedly stating ‘I don’t know’ and delaying resolution for nearly a year.

The Broader Impact: Stifled Innovation and Market Concentration

The concerns raised by these South Korean developers echo a growing global debate about the power of app store gatekeepers. Critics argue that the high commission rates and restrictive policies stifle innovation, limit consumer choice, and contribute to market concentration. the current landscape favors large, established companies that can absorb the fees, while smaller, self-reliant developers struggle to compete.

According to recent industry reports, app store commissions generated billions of dollars in revenue for Apple and Google last year. While these companies have made some concessions in recent years,such as reducing the commission rate for smaller developers,many argue that more fundamental reforms are needed to create a fairer and more competitive app ecosystem.

Looking ahead: Potential Solutions and Regulatory Scrutiny

The dispute between small game developers and app store giants is highly likely to continue, with potential solutions ranging from regulatory intervention to option payment systems. Several countries are currently investigating Apple and Google’s app store practices, and some have already introduced legislation aimed at promoting competition and protecting developers’ rights.

The outcome of these legal and political battles will have a notable impact on the future of the app economy and the ability of small and medium-sized businesses to thrive in the digital age. The fight for fair in-app payment policies is not just about money; it’s about preserving innovation, fostering competition, and ensuring a level playing field for all developers.

The Squeeze on App Store Profits: A Growing Crisis

A coalition of app developers is voicing increasing concerns over what they describe as excessive fees imposed by major app store operators, specifically Google and Apple. These developers claim that the current in-app payment structures, which can take up to 30% of revenue, are considerably impacting their profitability and hindering innovation. The situation is further complex by advertising restrictions that favor the platforms themselves.

The Impact of High commission Fees

For many developers, the high commission fees translate directly into reduced profits or, in certain specific cases, substantial losses. Some developers report facing arbitrary rejection or delays in the app review process, adding another layer of financial strain. This is notably concerning given the global app market is projected to reach $407.31 billion in 2028, highlighting the significant economic stakes involved.

The In-App Payment Law: A Toothless Tiger?

While South Korea introduced groundbreaking legislation in 2021 to prevent app market operators from forcing developers to use specific payment methods, its effectiveness is being questioned. this law,the first of its kind globally,aimed to promote fair competition by allowing third-party payment options. Though, developers argue that the alternative payment systems offered by Google and Apple are not significantly cheaper, with fees still hovering around 26%, plus additional charges from payment gateway (PG) companies (4-6%).This leaves developers with little financial incentive to switch.

The third-party payment fee is set at 26% without a big difference from the existing fee (30%),and the PG company fee (4 ~ 6%) is more burdensome,so there is no choice.

Advertising Restrictions: A Double-Edged Sword

Beyond payment fees, developers are also troubled by advertising restrictions that appear to favor Google and Apple’s own advertising platforms. The limited availability of advertising options outside these platforms puts developers at a disadvantage, potentially leading to higher advertising costs and reduced visibility.

Calls for Reform and Legal Action

Advocacy groups are urging for a significant reduction in in-app payment fees, suggesting a target range of 4-6%.They also advocate for stronger legal measures to prevent anti-competitive practices by app store operators.The aim is to establish a legal framework that mirrors the anti-trust rulings against Google and Apple in the United States,ensuring that similar protections are available to developers in other regions.

Gyeongsil -Ryun urged that the in -app payment fee rate should be reduced to 4-6%, and the law should be banned by the law. He also argued that legal basis should be established so that the prohibition order, such as Google and Apple’s anti -dictatorship ruling by the US federal courts, would be applied in the same way in Korea.

Global Scrutiny and Legal Battles

Google and Apple are currently facing numerous lawsuits and regulatory challenges in the United States and elsewhere, as authorities scrutinize their app store practices. Apple, for example, recently sought to suspend a US court order that would have allowed external payment options within its App Store, signaling its determination to maintain control over its payment ecosystem.