Tag: South Korea

SEOUL: 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 inapp payment systems. 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.

The tech giants have faced widespread criticism over their practice of requiring app developers to use in-app purchasing systems, for which the companies receive commissions of up to 30%. They say the commissions help pay for the cost of maintaining the app markets. The legislation prohibits the app market operators from using their monopolies to require such payment systems, which means they must allow alternative ways to pay.

It says the ban is aimed at promoting fairer competition. The bill aims to prevent any retaliation against developers by banning the companies from imposing any unreasonable delay in approving apps. The legislation also allows authorities to investigate the operations of app markets to uncover disputes and prevent actions that undermine fair competition.

Regulators in Europe, China and some other markets worry about the dominance of Apple, Google and other industry leaders in payments, online advertising and other fields. Chinese regulators have fined some companies for antimonopoly violations, while other governments are wrestling with how best to keep markets competitive. The Korea Internet Corporations Association, an industry lobby group that includes South Korea’s largest internet companies, welcomed the passage of the bill, which it said would create healthier competition.

Google said it is considering how to comply with the legislation. “Google Play provides far more than payment processing, and our service fee helps keep Android free, giving developers the tools and global platform to access billions of consumers around the world,” it said in a statement. Apple responded to an email reiterating a statement issued last week. “We believe user trust in App Store purchases will decrease as a result of this proposal — leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple.”