Google is considering launching a version of YouTube Premium that excludes YouTube Music in South Korea.
The potential move, reported by Korea JoongAng Daily on Tuesday (April 15), comes amid ongoing negotiations with South Korea’s Fair Trade Commission (FTC), which has been investigating Google for potentially anti-competitive bundling practices.
Last year, the FTC started investigating major international platforms like Google and Meta from the US and AliExpress and Temu from China over potential unfair business practices.
At the time, JoongAng reported that regulators were exploring whether music streaming services warrant similar oversight due to their growing influence.
“The FTC is eyeing music streaming services to be included in this bill, as such platforms have infiltrated deep into people’s lives,” FTC Chairman Han Ki-jeong was quoted by JoongAng as saying at an event last year.
The FTC then sent Google Korea what amounts to an indictment in July, arguing that its practice of bundling YouTube Music with YouTube Premium violates fair trade laws.
Instead of continuing a regulatory battle, Google has reportedly proposed corrective measures through a “consent decision” process, a mechanism that allows the FTC to suspend its review if the company voluntarily offers remedies to address consumer harm.
The FTC reportedly believes Google took advantage of YouTube’s dominant market position by bundling YouTube Music with Premium subscriptions.
To address this concern, Google could introduce a YouTube Premium Lite plan in South Korea, a lower-cost subscription that offers ad-free YouTube viewing but excludes YouTube Music, JoongAng reported.
Last month, YouTube announced that it is expanding its Premium Lite pilot to users in the US. A Premium Lite subscription will cost $7.99 per month, significantly lower than the $13.99 full YouTube Premium subscription in the US. A standalone YouTube Music Premium plan costs $10.99 per month.
YouTube’s Global Head of Music, Lyor Cohen, last month said that the Premium Lite expansion is further “feeding [YouTube’s] subscriptions funnel.”
Korean subscribers currently pay 14,900 won ($10) per month for YouTube Premium, while YouTube Music as a standalone service costs 11,990 won ($8.38) per month.
“Many users access YouTube Music through bundled benefits from YouTube Premium” in Korea, JoongAng said, citing the Korea Creative Content Agency’s (Kocca) 2024 Music User Survey.
“Interest in subscribing to music-only streaming services is relatively low,” the Kocca report added.
The case highlights South Korea’s increasing focus on regulating tech platforms. Last month, the FTC slapped a 390 million won ($272,600) fine on Kakao Entertainment for misleading advertising practices in music streaming.
In August last year, the FTC sent examination reports to five major OTT and music streaming platforms, alleging that they have not provided users with the ability to terminate their subscriptions mid-billing cycle, or have failed to inform consumers of their refund rights.
These companies include Netflix‘s Korean affiliate and Spotify Korea, as well as local video streaming platforms Wavve and Watcha Inc., and music streaming platform NHN Bugs Corp.
Google’s bundling issues in South Korea are reminiscent of the scrutiny faced by Spotify in the US over its own bundling practices. In May last year, Spotify was sued by the Mechanical Licensing Collective (The MLC), the entity that collects mechanical royalties in the US, for allegedly underpaying royalties to songwriters and publishers by bundling its services.
The conflict was triggered by Spotify’s move to reclassify its Premium subscription tiers as “bundles,” in March 2024, as they now include 15 hours of audiobook access each month.
The move controversially resulted in Spotify paying a lower mechanical royalty rate to publishers and songwriters in the US.
Spotify won that lawsuit in January, with a court granting its motion to dismiss the lawsuit “with prejudice.” The MLC asked the court to reconsider the dismissal in February.
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