South Korea to end Google and Apple control of app store payments

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The South Korean government has voted to force Apple and Google to accept alternative payment in the App Store, threatening the companies’ exclusive commission.

As expected, the South Korean plenary vote of the country’s National Assembly has backed the Telecommunications Business Act. Apple and Google won’t be able anymore to force developers to sell apps through the App Store and to pay commissions to the companies.

According to the Wall Street Journal the President Moon Jae In must now sign the bill into law. The new law will prohibit Apple and Google not only from using their in-app payment system, but also from unreasonably delaying the deletion of apps.

These conditions also prevent companies from retaliating against app developers who use other payment systems.

If Apple or Google violate the law, they will be fined up to 3% of all revenues in South Korea. This includes hardware sales.

Meghan DiMuzio (Executive Director of the Coalition for App Fairness) stated that “South Korea’s app store law represents a significant step in the global fight for fairness in the digital economy.” “We salute South Korean lawmakers and President Moon Jaein for setting an example to the rest of the globe for app store gatekeepers being held accountable for their harmful, anti-competitive practices. The Coalition for App Fairness hopes that U.S. lawmakers and European legislators follow South Korea’s example and continue their important work to equalize the playing field for all app developers.

After lobbying by Apple, Google and other technology organizations, the vote was taken. Apple maintained that the Telecommunications Business Act would make the App Store less reliable for downloading apps.

Apple stated that “user trust in App Store purchases will decline as a result,” and added that this would lead to fewer opportunities “for the over 482,000 registered Korean developers who have earned more KRW8.55 trillion so far with Apple.”

Google, for its part, stressed that passing the law would be detrimental to both consumers and developers.

However, speaking before the vote, Korea Communications Commission Chairman Han Sang-hyuk said that work could continue on precisely how the law would be implemented.

He said that adjustments could be made to the policy’s execution. “We are aware of the concerns of Apple & Google and will implement them with consideration for both industry stakeholders as well as users.

As yet, it is not clear whether the White House will respond to the vote. The Information Technology Industries Council of the USA believes that South Korea’s bill may be in violation with joint trade agreements.

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