The South Korean law that curbs in-app payment commissions

Google and Apple make a lot of money from the commissions they take from developers who must use those companies in-app billing systems when using these companies app stores – now a South Korean law will attempt to stop market-dominating firms forcing developers to use their systems.

Why it matters

With increased scrutiny from regulators around the world concerned that certain large tech firms are abusing their market power, this first legislative step will be closely followed by policymakers and developers to see if app store owners’ grip on developers can be loosened.

What’s going on

• The law, an amendment to South Korea’s Telecommunications Business Act, stops app markets from stipulating the use of their proprietary in-app payment systems.
• A potentially more complicated aspect of the law is a restriction on platforms’ ability to delay approval or even delete apps that do not comply to its system.
• Fines can go up to 3% of firms’ South Korean revenues.
• The amendment follows a blockbuster antitrust lawsuit between Fortnite-maker Epic Games and Apple/Google, after the developer was booted off both app stores for circumventing these systems.

What the platforms say

This opens users to the risk of fraud, Apple told the Wall Street Journal.

Google says the commissions keep its Android OS free to use, and that access to scale is more important.

Sourced from the Wall Street Journal