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South Korea Passes Legislation Forcing Apple and Google to Change In-App Payments

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South Korea’s National Assembly approved legislation on Tuesday that bans app store operators such as Google and Apple from forcing developers to use their in-app payment systems.

According to a new report from the Wall Street Journal, South Korea has become the first country to pass a law ending Apple and Google’s domination of payments on their mobile platforms, setting a radical precedent for their lucrative app store operations everywhere from India to the United States.

South Korea is reportedly the first country in the world to pass such a bill, which becomes law when it is signed by the president, whose party has backed the legislation.

Once the law comes into effect, Apple will need to enable third-party payment options on its iOS App Store, which currently demands that all transactions be handled through Apple’s systems, for which the company takes a 30% cut.

Similarly, Google will need to do the same for its Google Play store. While Android systems enable third-party app stores and direct payments through other channels, Google Play remains the dominant marketplace in the ecosystem and takes a similar 30% cut.

The decision marks the culmination of a year-long debate, with the bill originally proposed last August. 180 of lawmakers in attendance voted in favour of the amendment.

“This could presage similar actions elsewhere,” said Omdia analyst Guillermo Escofet, who specializes in digital consumer platforms. “Regulators, lawmakers and litigators in North America and Europe are also scrutinizing app-store billing rules, and the overriding political mood has become hostile to the enormous amount of power concentrated in the hands of the tech giants.”

Apple and Google have maintained that commissions charged are standard in the industry and fair compensation for building safe marketplaces where developers can reach people around the world.

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