South Korean MPs are expected to ban Apple & Google from forcibly requiring app developers to use their payment systems on Tuesday. This effectively declares illegal their lucrative South Korea bans Google monopoly.
The South would be the first major economy to adopt legislation on the subject, and it would be up for a vote at the national assembly. This could become a precedent for other countries around the globe.
Three senators in the United States introduced this month a bill to ease the grip of tech companies on their stores. Meanwhile, in Europe, lawmakers are discussing legislation that could force Apple into offering alternatives to its App Store.
This South Korean measure comes amid criticism from Apple and Google for charging up to 30% commission on app sales, and requiring that their own payment systems be used to collect a portion of transactions.
Locally known as the “Anti-Google Law”, the Korean law will allow users to choose from a variety of payment providers for their apps, bypassing store owners’ charges.
“This law will definitely set a precedent in other countries as well as app developers, content creators, and global content creators,” Kang Ki-hwan from the Korea Mobile Internet Business Association said AFP.
Google will enforce a global requirement that developers use its payment system, with its 30% commission above a threshold, for in-app purchases later this year.
South Korea’s government plans to start charging commissions on all content payments starting October. This will replace an exemption that was only applicable for online games.
This announcement provoked anger from South Korean creators and artists, with web fiction writers accusing Google of power abuse and webtoon artists agitating for the new law.
“Without this law, our working environment — where creators receive full rewards for all their efforts — would have been destroyed,” SeoBum-gang, a webtoon who heads the Korea Webtoon Industry Association told AFP.
We need this law to protect our industry’s diversity, so artists and creators from all backgrounds can share their content freely without worrying about commission fees.”
Apple and Google maintain that the commissions they charge are fair and standard in the industry. They also claim fair compensation for creating safe marketplaces where developers have access to people all over the globe.
Apple informed AFP ahead of the debate that it would expose digital purchasers to fraud, weaken their privacy protection, and make parental controls less effective.
It stated that it believes the proposal will reduce user trust in App Store purchases, which will lead to fewer opportunities to 482,000 registered developers in Korea, who have earned more than 8.55 trillion won so far with Apple.
Google Korea didn’t respond to requests from AFP for comment.
These two tech giants control the South Korean online app market, which is the 12th largest economy in the world. South Korea is known for its technological prowess.
According to data from Seoul’s science minister, Google’s Play Store generated revenue of nearly 6 trillion won ($5.2 Billion) in 2019. This accounts for 63 percent.
Apple’s App Store accounted for 24.4 percent of all app store sales in the United States in the same year.