South Korea’s parliamentary committee on Wednesday passed a bill to ban Google and Apple from forcing app developers to use the platforms’ payment systems.
The legislation and judiciary committee of the National Assembly approved the revision of the Telecommunications Business Act, which seeks to bar app market operators from requiring developers to use certain payment systems by unfairly using their positions, according to media reports.
If the bill is approved in a plenary session later, South Korea will be the first country to bring such curbs on global technology giants’ in-app billing policies, Yonhap News Agency reported.
The Anti-Google Law was submitted to parliament in August 2020, one month after Google said it would have all apps use its own billing system and charge 30 percent commission on all in-app purchases.
Earlier this year, Google decided to lower its commission fees to 15 percent for the first $1 million of revenue earned by developers.
Apple cut the 30 percent rate by half for app developers that earn up to $1 million annually at the start of this year.
Sales from Google Play Store in South Korea were estimated at 5 trillion won or $4.3 billion last year, accounting for two-thirds of the country’s total, compared with those from Apple’s App Store at 1.6 trillion won, according to the Korea Mobile Internet Business Association.
Both Apple and Google have faced global criticism because they require software developers using their app stores to use proprietary in-app payment systems that charge commissions of up to 30 percent on in-app purchases, Reuters reported.
For gaming apps, Google has been forcing app developers to use its own payment system … and it wants to expand its policy to other apps like music or webtoon, said Kwon Se-hwa, a general manager at the Korea Internet Corporations Association, a nonprofit group representing Korean IT firms.
If the new bill becomes the law, developers will have options to use other independent payment systems, Kwon said.
The European Union last year proposed the Digital Markets Act, taking aim at app store commissions. The rules are designed to affect large companies, but some European lawmakers are in favour of tightening them to specifically target American technology giants, Reuters reported in June.
Earlier this month in the United States, a bipartisan trio of senators introduced a bill that would rein in app stores of companies that they said exert too much market control, including Apple and Google.
In South Korea, Google Play Store earned revenue of nearly 6 trillion won ($5.29 billion) in 2019, according to a government report published last year.
Earlier this year, Google said it will lower the service fee it charges developers on its app store from 30 percent to 15 percent on the first $1 million they earn in revenue in a year. Apple has made similar moves.
For Apple, 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.
In May, an antitrust lawsuit filed by the maker of the popular game Fortnite against Apple revealed that the game maker paid $100 million in commissions to Apple over two years.