Google, Apple cannot force developers into payment systems, says South Korea’s newly passed bill

South Korea’s parliament on Tuesday passed a bill banning major app store operators such as Google and Apple from forcing software developers to use their payment systems, effectively preventing them from charging commissions in in-app purchases.

It’s the first such constraint by big economies like Alphabet’s Apple and Google, which face global criticism for requiring the use of proprietary payment systems that charge commissions of up to 30%.

The final vote was 180 votes in favor of 188 present to approve the amendment to the Telecommunications Business Law, dubbed the “anti-Google law”.

“We will reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks,” a Google spokesman said in a statement to Reuters.

Google added that Google Play offers much more than payment processing, and its service fee helps keep Android free, giving developers the tools and global platform to reach billions of consumers around the world.

“It’s a model that keeps device costs down for consumers and allows platforms and developers to be financially successful. And just as it costs developers money to build an app, it also costs us money to build and maintain an operating system and a store. applications.”

Apple responded to an email reiterating a statement released last week.

“We believe that user confidence in App Store purchases will decrease as a result of this proposal – leading to fewer opportunities for the more than 482,000 registered developers in Korea who have earned more than KRW 8.55 trillion (about Rs. 53.915 million) by the year moment with Apple,” Apple said in a statement.

Based on the records of the South Korean parliament, the amendment prohibits market-dominant app store operators from forcing payment systems on content providers and “inappropriately” delaying the review or exclusion of mobile content from the app markets .

It also allows the South Korean government to require an app market operator to “avoid harm to users and protect the rights and interests of users”, investigate app market operators and mediate disputes related to payments, cancellations or refunds in the market of applications.

Apple on Thursday agreed to ease the App Store’s restrictions on small developers, allowing developers to promote payment options outside of Apple’s payment system.

Earlier this month in the United States, a bipartisan trio of senators introduced a bill that would control the app stores of companies they say have a lot of market control, including Apple and Google.

© Thomson Reuters 2021


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