South Korea’s Parliament Passes Bill to Curb Dominance of Google, Apple in Charging Commissions

On Tuesday, South Korea’s parliament approved a bill that bans major app store operators such as Google and Apple from forcing software developers to use their payment systems. The bill effectively stops the tech giants from charging commissions on in-app purchases. Dubbed the “Anti-Google law, 180 voted in favor out of 188 attending to pass the amendment to the Telecommunications Business Act in the South Korean parliament.

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.

This is the first such curb by a major economy on the tech giants like Google and Apple. Google has faced global criticism for forcing the use of their proprietary payment systems that charge commissions of up to 30 percent. The South Korean bill raises the stakes for Apple and Google who face similar legislation in the United States that was introduced earlier this month by several senators.

“We’ll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks,” a Google spokesperson said in a statement to Reuters.

Apple last week had agreed to loosen App Store restrictions for small developers, allowing developers to promote payment options outside Apple’s payment system.

Reacting to the passage of the bill, Apple in a statement said, “We believe user trust in App Store purchases will decrease as a result of this proposal—leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple.”