A South Korean parliamentary committee voted to amend a law toward banning Google and Apple from forcibly charging software developers commissions on in-app purchases, the first such curb by a major economy.
Based on South Korean parliament records, the amendment bans app store operators with dominant market positions from forcing payment systems on content providers and “inappropriately” delaying the review of, or deleting, mobile content from app markets.
It also allows the South Korean government to require an app market operator to “prevent damage to users and protect the rights and interests of users”, probe app market operators, and mediate disputes regarding payment, cancellations or refunds in the app market.
After the vote from the legislation and judiciary committee to amend the Telecommunications Business Act, dubbed the “Anti-Google law,” the amendment will come to a final vote in parliament.
If the law is passed, developers will be able to select which payment systems to use to process in-app purchases, meaning they may be able to bypass hefty charges imposed by the two longtime leaders.
Apple Inc and Alphabet Inc’s Google have both faced global criticism because they require software developers using their app stores to use proprietary payment systems that charge commissions of up to 30%.
In a statement, Apple said the bill “will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections”, hurt user trust in App Store purchases and lead to fewer opportunities for South Korean developers.
Wilson White, senior director of public policy at Google, said “the rushed process hasn’t allowed for enough analysis of the negative impact of this legislation on Korean consumers and app developers”.
This month in the US, a bipartisan group of senators introduced a bill that would rein in app stores of companies that they said exert too much market control, including Apple and Google.
To add on, Australia is piling on the pressure by floating reforms for how to tackle payment systems provided by Apple and Google. Australian Treasurer Josh Frydenberg called for new regulations on digital payments. “Digital wallets such as Apple Pay and Google Pay are used to make contactless payments just like debit cards issued by a bank, but the parties are subject to different regulatory settings,” he wrote in The Australian Financial Review.
“If we do nothing to reform the framework, it will be Silicon Valley that determines the future of a critical piece of our economic infrastructure.”
