South Korea ends app payment monopoly

South Korea ends app payment monopoly

The South Korean bill – dubbed the “anti-Google law” – will allow users to choose a payment system for the purchase of apps – AFP/Arquivos

South Korean lawmakers passed a law on Tuesday (31) banning Apple and Google from forcing app developers to use the two technology giants’ payment systems, outlawing their lucrative monopolies on the App Store and Play Store.

The bill passed by 180 votes to zero, making South Korea the first major economic power to pass such legislation. The decision could set a global precedent.

In the United States, three senators proposed a bill in August aimed at regulating the two dominant companies and forcing the Google-Apple duopoly to be much more open to competition.

MEPs are also debating the issue.

This South Korean initiative comes at a time when Apple and Google are, across the planet, the target of criticism, accused of charging a 30% commission on transactions made through their payment systems, which have become essential.

The South Korean text – known locally as “anti-Google law” – will give users the option to choose a payment system when purchasing apps.

“This law will certainly set a precedent for other countries, as well as for app publishers and content creators around the world,” Kang Ki-hwan, of the Korea Mobile Internet Business Association, told AFP.

Later this year, Google plans to impose a worldwide obligation on developers to use its payment system – with a 30% commission above a certain threshold – for in-app purchases.

In South Korea, it also plans to charge commissions on all content payments starting in October, ending an exemption whereby commissions were due only for online games.

The announcement has angered several South Korean artists and creators, web writers and webtoon artists, who accuse Google of “abuse of power” and campaign for the new law.

Apple and Google believe the fees charged are justified, saying they allow for safe purchases and allow app developers to reach users worldwide.

Ahead of the debate in the South Korean National Assembly, Apple told AFP that the law could put people who buy apps at risk of fraud, invasion of privacy and make parental controls less effective.

“We believe that user confidence in App Store purchases will decrease following this proposal, which will reduce opportunities for the 482,000+ app makers in Korea who have earned more than 8.550 billion won (6.2 billion euros) by the moment with Apple,” the American giant said in a statement.

Google Korea did not respond to AFP’s requests for comment.

These two tech giants dominate the online app market in South Korea, the world’s 12th largest economy and a leader in new technologies.

Google’s Play Store generated nearly 6 trillion won ($4.3 billion) in revenue in 2019, or 63% of total app sales in the country, followed by the App Store, which accounted for 24.4%, according to with data from the Seoul Ministry of Science.

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