South Korea Forces Apple and Google to Change In-App Payments
The law, the first of its kind in the world, deals a blow to the market dominance of the tech giants, which opposed the bill.
South Korea forces Google and Apple to allow third-party in-app payments.
Apple and Google control more than 85 percent of South Korea’s app market, lawmakers say.Credit…Patrick Semansky/Associated Press
By Jin Yu Young
Aug. 31, 2021, 9:50 a.m. ET
South Korea legislators on Tuesday approved the first law in the world that requires app stores to let users pay for in-app purchases through multiple payment systems, a blow to the market dominance of Apple and Google, which opposed the bill.
South Korea’s National Assembly passed amendments to the country’s Telecommunications Business Act that prevent app marketers like Google and Apple from forcing certain payment methods, unfairly delaying the review of mobile content and unfairly deleting mobile content from the app market.
The app-store revenue is lucrative for the tech giants. Apple takes a cut of up to 30 percent through in-app purchases,; last year, Google indicated that it intends to follow suit by applying a 30 percent cut to more purchases than it had in the past. The legislation will be a blow to the profit they make in South Korea, where the two control more than 85 percent of the app market, according to lawmakers.
The measures were proposed last year and faced strong resistance from Apple and Google. Two South Korean lawmakers, Jo Seoung Lae and Park Sungjoong, said Google representatives were in direct contact with the National Assembly and its staff.
“Google is a company that wants to maximize their profits,” Mr. Park said in an earlier interview. “Of course they are against people like us ministers who are trying to pass this law.”
Mr. Jo revealed that Apple “provided their feedback” opposing the legislation. Both lawmakers are members of the South Korea’s Science, ICT, Broadcasting and Communications Committee at the National Assembly.
The law is not expected to cause trade tensions between Seoul and Washington, but the Biden administration has expressed concern over that possibility, according to the director of the Asia Internet Coalition, which has Apple and Google listed among its members.