Story at a glance
- South Korea’s National Assembly made it illegal for Google and Apple to require developers to use their payment systems.
- The amendment targets the commissions both tech companies require for each app download or sale.
- Advocates say the law encourages competition and growth, but Google notes commission fees keep costs down.
Tech titans Google and Apple will be required to allow different payment systems to be used within the app store in South Korea as part of an amendment to the nation’s telecommunications law.
First reported by the Yonhap News Agency in Seoul, the National Assembly approved the revision of South Korea’s Telecommunications Business Act on Wednesday to prevent Google and Apple from requiring developers to use the companies’ proprietary payment systems.
The standard policies for app developers require as much as a 30 percent commission for app developers with each user download, purchase or usage of an app hosted in either the Apple app store or the Google Play Store. With South Korea’s new law, app developers using Google and Apple’s platforms will have options regarding its payment processes.
Advocates say this law is a groundbreaking step in the fight against monopolies within the tech industry. They argue lower rates for app sales and purchases will help developers and their businesses.
In South Korea alone, sales from the Google Play Store came in at about $4.3 billion, with Apple’s App Store netting $1.6 trillion.
“South Korea’s new app store law is a significant development in the global fight to bring fairness to the digital economy,” said Meghan DiMuzio, the executive director of the Coalition for App Fairness. “South Korean lawmakers and President Moon Jae-in have made history and are setting an example for the rest of the world. This law will hold app store gatekeepers accountable for their harmful and anti-competitive practices. The Coalition for App Fairness hopes U.S. and European lawmakers follow South Korea’s lead and continue their important work to level the playing field for all app developers and users.”
In March, amid pressure, Google adjusted its commission fee to include a 15 percent option.
In a statement to The Hill, Google said that its commission fee helps keep applications hosted on its Play Store accessible to global consumers, as well as lower device costs meant to spur application development and growth.
“Just as it costs developers money to build an app, it costs us money to build and maintain an operating system and app store,” a Google spokesperson said. “We’ll 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.”
U.S. lawmakers have taken similar steps with the Open Markets Act, a bill proposed by Sen. Richard Blumenthal (D-Conn.), which would apply similar regulations to developers working on the App Store.
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