South Korea will force app stores to accept alternative payment systems
The South Korean parliament has passed a bill that forces app stores like Apple and Google to accept alternative payment systems. Companies that do not comply with the law risk a fine of three percent of their turnover in the country.
With the change in law, providers of major app stores are no longer allowed to force app developers to use certain payment systems, writes The Wall Street Journal. App store providers are also prohibited from “delaying approving apps for an unreasonable amount of time” or from removing them from the app store. With these measures, the South Korean parliament wants to prevent app stores from banning apps that do not use the payment systems of a platform.
The adopted amendment to the law is a response to a step by Google, which has been paying closer attention to whether app developers use Google’s payment method or try to circumvent this for the past year. When apps use Google’s or Apple’s payment system, they must pay a maximum of thirty percent commission. According to WSJ, stricter monitoring of the use of these payment systems from Google could count on criticism from South Korean app developers.
Apple previously indicated that it was against the amended law. The company claims that users who purchase apps through third-party payment systems are at greater risk of ‘fraud and privacy breaches’. Google says the process to change the law has been “rushed,” meaning negative consequences for users and developers would not be fully understood. When President Moon Jae-in signs the amendment to the law, it will come into effect.
Mandatory payment systems is under pressure in more countries. Earlier in August, three US senators introduced a bill that, like the South Korean amendment to the law, requires app stores to allow external payment systems. In addition, the European Commission previously accused Apple of distorting competition because of the obligation for music streaming services to use Apple’s payment system.