Apple, Google to face restrictions on in-app buying commissions as South Korean parliament committee votes

A South Korean parliamentary committee voted on Wednesday to recommend changing a law, a key step to ban Google and Apple from forcibly charging software developers commissions on in-app purchases, the first of such restrictions on an in-app purchase. great economy.

Apple and the alphabet Google have come under global criticism for requiring software developers using their app stores to use proprietary payment systems that charge commissions of up to 30%.

In a statement on Tuesday, Apple said the bill “will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy,” hurt user confidence in App Store purchases and lead to fewer opportunities for South Korean developers.

Wilson White, senior director of public policy at Google, said that “the rushed process failed to sufficiently analyze the negative impact of this legislation on Korean consumers and app developers.”

Experts said app store operators could ensure the security of payment systems other than their own by working with developers and other companies.

“Google and Apple are not the only ones who can create a secure payment system,” said Lee Hwang, professor at Korea University School of Law specializing in competition law.

Others noted that South Korea has some of the world’s strongest legal protections for online transactions, and said app store operators should provide advanced services to increase their profits.

“Dominant app store operators with large platforms should now be looking to leverage value-added services, not just reduce the apps sold on their store,” said Yoo Byung-joon, professor at the Seoul National University School of Business specializing in e-commerce.

Based on South Korean parliament records, the amendment prohibits app store operators with dominant market positions from forcing payment systems on content providers and “inappropriately” delaying the process. review or removal of mobile content from application marketplaces.

It also allows the South Korean government to require an operator of the applications market to “prevent harm to users and protect the rights and interests of users”, probe operators of the application market and arbitrate disputes. regarding payment, cancellations or refunds in the application marketplace.

After the Legislative and Judiciary Committee votes to amend the Telecommunications Business Act, dubbed the “anti-Google law”, the amendment will go to a final vote in parliament.

The vote was due to take place on Wednesday, but the session was tentatively postponed to August 30, a parliament official told Reuters.

This month in the United States, a bipartisan group of senators introduced a bill that would curb the app stores of companies they say have too much control over the market, including Apple and Google.

© Thomson Reuters 2021

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