CCEJ: "Google, 5 Game Companies Suspected of Tax Evasion, Accounting Fraud"

Allegations of app marketplace fee rebates and marketing support
Complaint filed with the Financial Supervisory Service and National Tax Service; industry pushes back

The Citizens' Coalition for Economic Justice (CCEJ) said on Oct. 21 that it had filed a complaint with the Financial Supervisory Service and the National Tax Service against Google and five domestic game companies over allegations of tax evasion and accounting irregularities related to “Project Hug (GVP).”

Google logo. Reuters-Yonhap News

At a press conference that day, the CCEJ alleged that Google provided fee rebates and marketing support to five major domestic game companies—NC, Nexon, Netmarble, Com2uS and Pearl Abyss—in exchange for their not releasing games on competing app marketplaces.

The CCEJ called for an investigation, saying, “These game companies may have recorded the full 30% in-app purchase fees paid to Google as expenses while failing to properly include in taxable income the economic benefits they received from Google in the form of actual fee rebates and discounts.”

The Fair Trade Commission previously concluded that exclusive app marketplace agreements Google signed with major game companies violated the Monopoly Regulation and Fair Trade Act and began a review. In July, it reportedly proposed corrective orders and fines of up to 850 billion won.

However, the commission did not include the game companies that participated in GVP among those subject to sanctions, finding that they had effectively been unable to reject Google's offer. GVP is a program through which Google covers expenses related to Google Cloud, Google Ads and YouTube for major game companies.

When the commission began its review, Google said, “We will do our utmost to demonstrate during the upcoming review process that we did not violate the law.” A representative of one of the game companies named in the complaint also said, “The allegations of accounting or tax-related misconduct are completely unfounded.”

This content was produced with the assistance of AI translation services.