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 in-app payment systems.
South Korea is reportedly
the first country in the world
to pass such a bill.
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%.
prohibits the app market operators from using their monopolies to require such
payment systems, which means they must allow alternative ways to pay. 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.
Apple censured the
legislation, saying it will “put users who purchase digital goods from other
sources at risk of fraud, undermine their privacy protections, make it
difficult to manage their purchases” and make parental controls and other
features less effective.
The legislation also
allows South Korean 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 including search and online shopping giant Naver,
welcomed the passage of the bill, which it said would create healthier
competition and give users a wider variety of content at cheaper prices.
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.
“We’ll reflect on 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,” it said. Business Today