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South Korea moves to regulate Google and Apple’s control of app-store payments

Failure to comply could see companies fined up to 3% of their South Korean revenue

South Korea has ordered tech giants Google and Apple to allow developers to use their own payment systems for in-app purchases.

Lawmakers passed a bill to amend South Korea’s Telecommunications Business Act to prevent large app-market operators such as Google and Apple from requiring the use of their in-app purchasing systems.

Once the bill is signed into law by President Moon Jae-in, South Korea will become the first country to ban app-market operators from unreasonably delaying the approval of apps or deleting them from the marketplace.

Failure to comply could see companies fined up to 3% of their South Korean revenue by the Korea Communications Commission, the country’s media regulator.

“As bills with similar implications are being proposed in the US and Europe, South Korea’s bill will become a cornerstone for legislating app market platform regulations worldwide,” said Han Sang-hyuk, the commission chairman.

Why is the bill important?

  • When the law is introduced, 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.

  • For Google, it will need to do the same for its Google Play store as 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.

  • In the US, lawmakers have also introduced a similar bill that could impose new restrictions on app stores operated by Apple and Google.

  • Named the Open App Markets Act, it would enable the introduction of third-party app stores on Apple devices, and allow developers to both offer more competitive pricing and use non-Apple payment systems.

  • Apple is facing attacks from multiple vantage points over its App Store payment policies. Fortnite creator Epic Games sued Apple over being kicked out of the App Store for using a non-Apple in-app purchasing system.

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