South Korea will bar Apple and Google from requiring software developers to use their payment systems and effectively stopping them from charging commissions on in-app purchases.
The parliament’s legislation is expected to approve the amendment of the Telecommunications Business Act, dubbed the “Anti-Google law,” that takes aim at app store operators with dominant market positions, Reuters reported.
If the bill gets its nod, it will be put to a final vote on Wednesday. Since mid last year, the South Korean lawmakers have pushed the issue of the commission structure.
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According to reports, both the companies faced global criticism because they require software developers using their app stores to use proprietary in-app payment systems that charge commissions of up to 30 percent on in-app purchases.
Kwon Se-hwa, a general manager at the Korea Internet Corporations Association, a non-profit group representing Korean IT firms said, “For gaming apps, Google has been forcing app developers to use its own payment system… and it wants to expand its policy to other apps like music or webtoon.”
“If the new bill becomes the law, developers will have options to use other independent payment systems,” Kwon said.
Last year, the European Union proposed the Digital Markets Act, aiming at app store commissions. The rules are designed to affect large companies, but some European lawmakers are in favour of them to target American technology giants.
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In the United States, a bipartisan trio of senators had earlier introduced a bill that would rein in-app stores of companies that they said exert too much market control.
According to a government report published last year, in South Korea, the home of Samsung Electronics Co Ltd (005930.KS), Google Play Store earned revenue of nearly 6 trillion won (about $5.29 billion) in 2019.
Google has said that it will lower the service fee it charges developers on its app store from 30 percent to 15 percent on the first $1 million they earn in revenue in a year. Meanwhile, Apple has also made similar moves.
For Apple, commissions from in-app purchases are a key part of its $53.8 billion services business, and are also a major expense for some app developers.