It's dubbed the "anti-Google law".
South Korea is expected to bar Alphabet's Google and Apple from charging software developers commissions on in-app purchases.
It would be the first such curb by a major economy, and looks set to hurt the tech giants' lucrative revenue streams.
The bill could be put to a final vote on Wednesday (August 25).
Lawmakers in South Korea started raising the issue of the tech giants' commission structure last year.
Apple and Google have both faced global criticism.
They require software developers using their app stores to use in-app payment systems that charge commissions of up to 30% on purchases.
The European Union last year proposed its own Digital Markets Act, taking aim at such commissions.
In South Korea, the home market of Android phone maker Samsung, the Google Play Store earned revenue of $5.29 billion in 2019.
For Apple too, commissions from in-app purchases are a key part of its $53.8 billion services business.
And are a major expense for some app developers.