A new law enacted by South Korean lawmakers will now force Google and Apple to allow app developers to use other payment systems, potentially setting the scene for similar action in other nations.
The revised Telecommunications Business Act was passed by the National Assembly on Tuesday, with President Moon Jae-in’s party supporting it. Once President Moon signs it, it will become law.
Developers will be allowed to choose which payment systems to employ to process in-app sales under the new rule, potentially bypassing the two long-standing leaders’ high fees.
Apple currently charges up to 30% commission on some sales made through its platform, and developers argue they have little choice but to comply because Apple does not allow users to download apps from anywhere other than the company’s official store.
The measure prohibits app store owners from unfairly leveraging their market position to compel a certain mode of payment on all South Korean developers. Violations might result in fines of up to 3% of yearly sales, as well as penalties of up to 300 million Korean won ($257,000).
The bill has been called the “anti-Google law” in the nation, with lawmakers claiming that the Silicon Valley titan has abused its long-standing power to undercut developers.
Both corporations have retaliated, claiming that the rule would ultimately harm app creators and users.
A Google representative said the firm will “reflect” on how it can comply with this rule while preserving a paradigm that promotes a high-quality operating system and app marketplace.
“We believe user trust in App Store purchases will decrease as a result of this proposal — leading to fewer opportunities for [them],” Apple said in a separate statement.
South Korea isn’t the only country in the region considering measures to rein in the two companies. Australian Treasurer Josh Frydenberg recently called on the government to impose fairer rules on digital payments.