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Google’s Unbundling Offer Puts Korean Regulators in Tight Spot

By  |  May 22, 2025

South Korea’s Korea Fair Trade Commission (KFTC) is caught between regulatory duty and international diplomacy as it deliberates on whether to accept Google Korea’s offer to cease bundling YouTube Music with its YouTube Premium service, according to The Korea Times.

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    The proposal from the tech giant comes as part of ongoing discussions with the KFTC, which has been investigating the company over what it deems “anti-competitive cross-sales practices.” At the heart of the matter is Google’s longstanding practice of combining YouTube Premium and YouTube Music into a single subscription offering — a practice exclusive to the Korean market. The antitrust body began reviewing Google’s proposed resolution on Thursday, a process expected to stretch over several months.

    Per The Korea Times, should the regulator approve the offer, it would mark the end of a years-long investigation and exempt Google Korea from penalties tied to business activities the agency has previously criticized as unfair. However, the KFTC’s decision is being weighed against the backdrop of broader geopolitical and trade considerations.

    Korea is currently in sensitive trade negotiations with the United States aimed at mitigating the effects of tariffs imposed by the Trump administration on key Korean exports such as automobiles, semiconductors, and steel. In this context, any hardline regulatory move against a major American tech firm like Google carries potential risks of trade retaliation.

    A KFTC official, speaking to The Korea Times, noted that the agency would continue dialogue with Google Korea to refine the proposal’s specifics. “We cannot say for sure when the process will come to an end for the time being,” the official stated, underscoring that delays are likely if consensus is not reached swiftly.

    As part of its proposal, Google Korea has pledged 30 billion won (approximately $21.7 million) toward a co-prosperity fund. This initiative is intended to support users transitioning to unbundled subscription plans and to bolster Korea’s music ecosystem, including support for local artists and creators.

    The move follows sustained criticism that tying YouTube Music to YouTube Premium has disadvantaged domestic music streaming services. Data from Wiseapp Retail Goods, cited by The Korea Times, shows that YouTube Music reached 9.79 million monthly active users in South Korea as of April — the highest among streaming platforms. This represents a more than twofold increase over four years, during which local competitors have seen their market presence erode.

    While some in the industry welcome the unbundling as a positive step toward fairer competition, expectations remain tempered. “Millions of customers have already become accustomed to YouTube Music,” an executive from a local streaming service told The Korea Times, suggesting that Google’s market lead may not easily be reversed.

    Source: The Korea Times