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Seoul, South Korea (AP) – The South Korean National Assembly passed legislation Tuesday banning app store operators like Google and Apple from forcing developers to use in-app payment systems.
South Korea is reportedly the first country in the world to pass such a bill, which became law when signed by the president, whose party supported the law.
Tech giants have faced widespread criticism for their practice of requiring app developers to use in-app purchase systems, for which companies charge up to 30% commission. They say commissions help pay the cost of protecting app markets.
Legislation prohibits app market operators from using their monopoly to claim such payment systems, i.e. they must allow alternative means of payment. He says the ban is aimed at promoting fairer competition.
The bill aims to prevent any retaliation against developers by prohibiting companies from imposing any unreasonable delay in approving apps.
The legislation also allows South Korean authorities to investigate the operations of app markets to uncover disputes and prevent actions that undermine fair competition.
Regulators in Europe, China and several other markets are concerned about the dominance of Apple, Google and other industry leaders in payments, online advertising and more. Chinese regulators fine some companies for anti-monopoly violations, while other governments grapple with the best way to keep markets competitive.
The Korea Internet Companies Association, an industry lobby group that includes South Korea’s largest internet companies, including search and online shopping giant Naver, has welcomed the bill’s passage, which it says will create healthier competition and offer users a wider range of content at cheaper prices. .
Google said it was considering how to comply with the legislation.
“Google Play provides much more than just payment transactions, and our fee-for-service helps keep Android free, giving developers the tools and a global platform to reach billions of consumers around the world,” it said in a statement.
“Developing an app costs developers money, and building and maintaining an operating system and app store costs us money. “We will consider how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and will share more in the coming weeks.”
Last week in the US, Apple announced it had agreed to allow developers of iPhone apps to email users about digital subscriptions and cheaper payment methods for media.
The concession was part of the preliminary settlement of a lawsuit filed on behalf of iPhone app developers in the US. popular video game Fortnite.
The judge wondered why Apple couldn’t allow app developers like Fortnite to display various payment options in their apps.
Apple did not immediately respond to requests for comment on South Korean legislation on Tuesday.
Over the past year, both Google and Apple have cut their in-app commissions from 30% to 15% for developers with less than $1 million in annual revenue – a move that covers most of the apps in their respective stores. But the lower commissions aren’t helping the biggest app makers like Epic and Spotify, which receive their complaints worldwide.
The European Union Executive Commission has accused Apple of distorting competition by forcing developers to use the payment system and banning them from informing users about cheaper ways to pay for subscriptions that don’t require going through an app.
Dozens of US states filed lawsuits targeting Google’s store in July. Meanwhile, Australian regulators have said they are concerned about restrictions on in-app purchases, meaning developers “have no choice” but to use Apple and Google’s own payment systems, according to an interim report released in April.
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