No photo available

22 views

In SoKor app stores can’t force developers to use in-app payment systems

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%. 

The legislation 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