The South Korean government has now officially voted to force both Apple and Google to accept alternative payment methods in the App Store. The decision threatens the so-called Apple and Google Tax.
As expected, the South Korean plenum of the country's National Assembly has backed the law for telecommunications companies. Apple and Google will no longer be able to require developers to sell apps through the App Store and pay the companies' commission. As the Wall Street Journal reported, the law must now be signed by President Moon Jae-in. The new law not only prohibits Apple and Google from using their own in-app payment systems exclusively, but also from unreasonably delaying the rollout of apps or removing them completely from the store.
Apple and Google lose control of the App Store
The new guidelines are intended to give developers more freedom and prevent the two companies from retaliating against app providers who choose to use alternative payment systems. If Apple or Google do not comply with the new law, the government will impose a fine of up to 31% on all revenue generated in South Korea, including hardware sales. Meghan DiMuzio, Executive Director of the Coalition for App Fairness, said:
South Korea's new app store law is a significant development in the global fight for fairness in the digital economy. We applaud South Korean lawmakers and President Moon Jae-in for setting an example for the rest of the world to hold app store gatekeepers accountable for their harmful and anti-competitive practices. The Coalition for App Fairness hopes U.S. and European lawmakers will follow South Korea's lead and continue their important work to create a level playing field for all app developers and users.
Other countries will most likely follow
Apple previously claimed that the provisions of the Telecommunications Business Act would mean the App Store could no longer be a trusted place to download apps. Apple issued the following statement before the landmark vote:
This proposal will reduce user confidence in App Store purchases, resulting in fewer opportunities for the more than 482,000 registered developers in Korea who have earned more than KRW 8.55 trillion from Apple to date.
For its part, Google also stressed that a decision to pass the law would be harmful to both developers and consumers. However, Korea Communications Commission Chairman Han Sang-hyuk said before the vote that they could continue to work on how exactly the law would be implemented.
Adjustments may be made to the way the policy is implemented. We are aware of Apple and Google's concerns, so we will implement it while taking into account the interests of the industry and users.
According to the report, Apple's App Store monopoly in South Korea will end after the antitrust law was passed, affecting both the iPhone maker and Google. This is now expected to encourage other countries to pass similar laws. (Photo by mangpor_2004 / Bigstockphoto)
