Google and Apple’s in-app billing system likely face ban under new Korean law

2021.07.21 14:50:43 | 2021.07.21 14:51:14

[Graphics by Song Ji-yoon]이미지 확대

[Graphics by Song Ji-yoon]

Mobile app market operators like Google and Apple won’t be able to force Korean app developers with their own billing systems for in-app purchases as the dominant ruling party has pushed the related bill through the judiciary committee, a step before it is put to a vote at the National Assembly.

Since the ruling party commands a comfortable majority, the revised bill will nullify Google’s new billing system and 15-30 percent commission charge for app store purchases from October.

The U.S. internet giant has tried to persuade against the law by cutting 30 percent app store commission rate by half to 15 percent practically for all app developers and allowing grace period until March.

The proposed amendments to the Telecommunications Business Act also include an article that prohibits an unfair delay in review of new app registration and deleting of content from the market. The rule to force developers to distribute their apps fairly on all app markets however were excluded due to concerns about favoritism towards Korea’s home-grown app market One Store, mostly owned by SK Telecom and Naver.

Apple in its statement expressed deep regret at the decision, saying the drafted law will expose fraud risk to users who bypassed the App Store to buy digital goods and undermine the privacy protection options as well as making it difficult to manage the customer purchase records.

More than 475,000 developers registered in Korea have so far earned over 8.39 trillion won in revenue on Apple’s App Store, but the new law will lessen the opportunities to make more profits and consumer confidence in digital purchases, Apple added.

Google did not issue any statement.

The app industry welcomed the news.

“The proposed revision to the act will ease the risk to local startups and content industry by correcting app market operators’ unfair business practices and bringing fairer competitive environment,” said startup association Korea Startup Forum.

By Hong Sung-yong and Lee Ha-yeon

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