South Korea bans Google and Apple payment monopolies

SEOUL, South Korea (AP) – The National Assembly of South Korea on Tuesday approved a law prohibiting app store operators such as Google and Apple from forcing developers to use their integrated payment systems.

South Korea would be the first country in the world to pass such a bill, which becomes law when signed by the president, whose party backed the legislation.

Tech giants have been widely criticized for their practice of forcing app developers to use integrated purchasing systems, for which companies receive commissions of up to 30%. They say the commissions help pay for the cost of maintaining app marketplaces.

The law prohibits operators of the app market from using their monopolies to demand such payment systems, which means that they must authorize other means of payment. He says the ban is intended to promote fairer competition.

The bill seeks to prevent retaliation against developers by prohibiting companies from imposing an unreasonable delay on app approval.

Apple criticized the legislation in a statement Tuesday, saying it “would put users who buy digital goods from other sources at risk of fraud, undermine their privacy, make it harder to manage their purchases” and would make parental controls and other features less effective.

“We believe that user confidence in App Store purchases will decrease as a result of this legislation” and lead to fewer opportunities for Korean app developers, the company said.

The legislation also allows South Korean authorities to investigate the operations of app marketplaces to uncover disputes and prevent actions that undermine fair competition.

Regulators in Europe, China and some other markets are concerned about the dominance of Apple, Google and other industry leaders in payments, online advertising and other areas. Chinese regulators have fined some companies for violations of anti-monopoly laws, while other governments struggle to find the best way to keep markets competitive.

The Korea Internet Corporations Association, an industry lobby group that includes South Korea’s largest internet companies, including online shopping and search giant Naver, welcomed the adoption of the draft. law, which she said would create healthier competition and offer users a wider variety of content at lower prices. .

Google said it was considering how to comply with the legislation.

“Google Play offers more than just payment processing, and our service fees help keep Android free, giving developers the tools and the global platform to access billions of consumers around the world,” he said. he said in a statement.

“And just as it costs developers money to build an app, it costs us money to build and maintain an operating system and an app store. We will be thinking about how to comply with this law while maintaining a model that supports a high quality operating system and app store, and we will share more in the coming weeks, ”he said. declared.

In the United States, Apple announced last week that it had agreed to allow iPhone app developers to email users on cheaper ways to pay for subscriptions and digital media.

The concession was part of a preliminary settlement of a lawsuit filed on behalf of iPhone app developers in the United States. popular Fortnite video game.

The judge wondered why Apple couldn’t allow app developers like Fortnite to display a range of payment options in their apps.

Over the past year, Google and Apple have reduced their in-app commissions from 30% to 15% for developers with annual revenue of less than $ 1 million, a move covering most of the apps from their respective stores. But the lower commissions don’t help the biggest app makers like Epic and Spotify, which have filed complaints around the world.

The Executive Commission of the European Union has accused Apple of distorting competition by forcing developers to use its payment system and banning them from telling users about cheaper ways to pay for subscriptions that don’t involve going through. an application.

Dozens of US states filed a complaint in July against the Google store. Australian regulators, meanwhile, have also said they are concerned about restrictions on in-app purchases which mean developers “have no choice” but to use Apple’s own payment systems. and Google, according to an interim dominance report released in April.

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About Matthew R. Dailey

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