Aofex

South Korea’s Legislative Bill Restricts Google, Apple Dominance in App Store Payments

UTC by Gladis Monteiro · 4 min read
South Korea’s Legislative Bill Restricts Google, Apple Dominance in App Store Payments
Photo: Unsplash

South Korea has taken a powerful move against these global monopolistic gatekeepers in order to protect their citizens while also giving them the payment choice they deserve in the app market.

South Korea’s latest move will stop tech giants Google LLC (NASDAQ: GOOGL) and Apple Inc (NASDAQ: AAPL) from forcing users to carry out transactions only through their inbuilt payment system, thereby charging a commission as high as 30%.

South Korea’s National Assembly approved the amended Telecommunication Business Act bill to make giant store operators like Google and Apple step down from their dominant positions. An impressive 180 out of 188 favored the amendments through their votes. Once signed by President Moon Jae, the legislation will turn into law.

Why Is This Anti-Google Bill Important?

Aptly nicknamed Anti-Google Bill, this South Korea-approved bill seeks to provide developers with alternate payment platforms apart from the operators’ proprietary payment feature. Additionally, it will also address the delay in app reviews apart and their deletion from the app markets.  As per reports, the bill also allows the government to become a mediator to resolve disputes related to refunds, payments and cancellations.

South Korea also turns out to be the first country to put such curbs on global giants like Google and Apple. The latter entities already face global criticism for their insanely high commissions of up to 30% on their flagship payment system. Thus, this bold move on the part of the South Korean government is a landmark decision that will soon be adopted by other economies around the world.

South Korea’s Latest Bill Gets Reaction from Google and Apple

According to the CNBC report, an Apple spokesperson shed light on the challenges that will arise out of the bill’s implementation. From putting iPhone customers at fraud risks and reducing ease of use with respect to ‘Ask to Buy’ and ‘Parental Controls’ features, the spokesperson also pointed out the compromising of privacy protections. The last one will especially lead to a blow in user trust.

Google, on the other hand, has accepted the new regulations and will work on a sustainable model that will help them comply with the new rules in addition to maintaining the quality of its products. The Google Spokesperson however did not shy away from reiterating the benefits in support of the commission including but not limited to keeping Android free and offering developers a global platform with tools to access Google’s massive customer base.

Impact of the Bill

South Korea has taken a powerful move against these global monopolistic gatekeepers in order to protect their citizens while also giving them the payment choice they deserve in the app market. With current global conditions conducive as more and more regulators are scrutinizing Google and Apple’s sky-high charges, this would likely give a head start to creating a global regulatory framework to end the monopoly of a handful of tech giants in the market.

The creation of a fair app ecosystem is the goal of the Korea Internet Corporations Association that hopes the bill would ensure the rights of both consumers and developers. The bill couldn’t have been approved at a better time as there have been some changes in the store operator policies in the last few months. Apple agreed to allow developers to contact their customers and thereby provide direct payment routes. It also agreed to bring down the commission percentage to 15% for those developers on their store with less than $1 million in annual net sales.

Google, on the other hand, had brought down the commission rate to 15% in March for the first million dollars a developer generates. But soon, it went back to its original commission fee. With South Korea’s leadership in this fight against monopolistic threats, these big tech giants will soon need to introduce big changes in their existing business models.

Business News, Mobile, News, Technology News
Gladis Monteiro

Content specialist with interest across sectors like Finance, Politics, Environment, Technology & Education. Loves Fiction! A reader, dreamer & blogger. When not writing, you will find her enjoying solitude like her cats

Related Articles