After the United States and the European Union, South Korea also wants stricter regulations for the app stores of the two technology giants via a new bill. The Moon Jae-in government is targeting commissions and the payment system for in-app purchases, which locks developers into the duopoly.
Will it soon be the end of Apple's 30% commission on in-app purchases in South Korea? The Korean government is pushing to end the duopoly of Google and Apple. The "Telecommunications business act" bill aims to prohibit the two giants from requiring developers to exclusively use their payment systems in in-app purchases, and therefore to charge a certain amount. Commission is up to 15% on all integrated purchases before the first million dollars of profits, before increasing to 30% permanently.
This bill, if passed, would be the first to take effect in a country with an economy of this size. After passing through a parliamentary committee, a plenary session vote was supposed to take place today, August 25, but was postponed according to Yonhap, the number one news agency in South Korea
Potential for security risks according to Apple
In 2020 in South Korea, Google Store revenues were estimated at 4.3 billion dollars according to the Korea Mobile Internet Business Association. Apple, on the other hand, made $1.3 billion from its App Store. Initiatives to restrict the duopoly have been flourishing in recent months. One example is the European Union's "Digital Markets Act," which aims to prevent online platforms from occupying a gatekeeper position and thus imposing unfair conditions. Or the "Open App Markets Act," a bill in the United States designed to curb app stores that exert too much control over the market.
In a statement released Tuesday, Apple said the bill will "put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections and make it difficult to manage their purchases," damaging users' trust in App Store products and reducing opportunities for South Korean developers. A response that echoes those of the Cupertino firm to other such bills.
So will South Korea, a pioneering country when it comes to innovation, be the first to finally legislate against app stores? It appears to be on track while things are heating up for Apple and Google.