On Wednesday, a South Korean parliamentary committee voted to recommend the amendment of a law, which would be a key step for banning Apple and Google from charging commissions from software developers forcibly on in-app purchases. This would be the first such ban to be imposed by a major economy.
Alphabet Inc.’s Google and Apple Inc. have received criticism globally because of the proprietary payment systems that software developers using their app stores have to use, thereby resulting in commissions of about 30%. On Tuesday, Apple made a statement where it said that this bill would undermine the privacy protection of users buying digital goods from other sources and would put them at risk of fraud.
It went on to say that the bill would also affect user trust in purchases from the App Store and would result in lower opportunities for developers in South Korea. Google’s senior director of public policy, Wilson White said that due to the rushed process, there just wasn’t enough analysis of the negative impact of this bill on Korean app developers and customers. According to experts, it is possible for app store operators to work with other companies and developers for ensuring security in payment systems that are not their own.
They said that Google and Apple were certainly not the only companies capable of creating a secure payment system. Others also noted that some of the world’s most robust legal protections were available in South Korea for online transactions. Thus, advanced services should be provided by app store operators for bolstering profits. The experts said that dominant app store operators that have large platforms should now consider value-added services for making a profit and not just focus on taking a cut from the apps that are available in their stores.
According to the parliamentary records of South Korea, the amendment will ban the app store operators that have dominant market positions to force content providers to use their payment systems. In this way, they will not be able to delete or delay the review of mobile content from the app store. Moreover, after the amendment, the South Korean government will also be able to protect the interests and rights of users and prevent any damage, mediate disputes related to payment, refunds, and cancellations in the app market and investigate app market operators.
The Telecommunications Business Act has been dubbed as the ‘Anti-Google law’ and the judiciary and legislation committee will vote on it first. Then, the amendment will be subjected to a final vote in the parliament. According to a parliament official, the vote had already been scheduled to take place on Wednesday. Unfortunately, the session had been delayed provisionally until August 30th until which the vote cannot take place.
A bipartisan group of senators in the United States had also introduced a bill this month for reigning in app stores of companies that are exerting excessive market control, including the likes of Google and Apple that appear to have the largest app stores.
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