Kakao steps back from conflict over Google's in-app payment

South Korea’s Kakao Corp. has voluntarily removed an external payment link from the country’s largest messaging app KakaoTalk in compliance with Google Inc.’s in-app payment policy.

The decision brought an end to a half-month conflict between the two companies, although a Korean regulator is looking into whether Google’s prohibition of developers from adding links to external payment websites is in violation of the local laws.    

“We decided to remove the external link for the convenience of our users,” Kakao said on Wednesday.

“We did our best to provide various payment options, but couldn’t drag out this situation to avoid the inconvenience of our users.”

Following Kakao’s announcement, KakaoTalk’s users are now able to download its updated version from Google Play Store, its app store operator.

Google had halted updates to KakaoTalk since June 30, citing a violation of its in-app payment policy. 

The move came after Google in April mandated app developers to use its first-party in-app billing system or a third-party payment option to sell digital goods or services.

If they failed to follow the policy, the US Big Tech firm warned that their apps would be removed from Google Play Store starting on July 1.

But Kakao had not yielded to the instruction and continued to add links that direct users to outside websites to bypass Google's billing system entirely.

As their conflict was protracted, the Korea Communications Commission (KCC), a media regulatory agency, stepped in to mediate a settlement between Google and Kakao last week.

KCC notified Google of a possible violation of the Korean law by denying a review of KakaoTalk’s updates on the ground that Kakao continued to add an external payment link in its Android app.

The regulatory body is now reviewing whether Google's denial of access to external payment links violates South Korean laws.

In August of last year, South Korean parliament passed the world’s first bill to ban Google, Apple Inc. and other app store operators from forcing certain payment schemes like Google’s in-app billing system on app developers.

Accordingly, Google agreed last year to allow third-party payment options for apps available on its app store.

Write to Seung-Woo Lee at leeswoo@hankyung.com
Yeonhee Kim edited this article