South Korea’s new competition law will force Apple and Google to support third-party payment options in the app store — the two companies have now received an explanation of their compliance plans by mid-month.
This could have broad implications, as similar pressures are applied in other countries, and Apple is likely to want to adopt a consistent approach around the world. Whatever the company proposes in October, it could reveal its third-party payment plans around the world …
We have previously described the background of this.
Apple’s monopoly on selling iOS apps and buying within apps is the biggest antitrust concern for the tech giant. Although Apple argues that the relevant market definition is a “smartphone app” in which there is no monopoly, many regulators and lawmakers around the world view the market definition as an “iOS app,” which they do.
That’s because most developers don’t really run an Android app, but not iOS. The iOS app is essential to reach a large portion of the population.
Many developers would like the opportunity to bypass Apple as a payment platform, and a growing number of governments seem to like it.
Apple believes that it has created a market for iOS applications and is entitled to a reward for that and for the opportunity it offers developers. The company has indeed made a big turnaround when it reduced the commission from 30% to 15% for the vast majority of developers, but has so far kept its weapon when it comes to anti-management policies, offering only a small concession to resolve a recent lawsuit.
South Korea has now told Apple and Google that they must allow developers to use third-party payment platforms to comply with the new competition law.
Deadline for third party payment plans for the App Store
Reuters reports that South Korea is giving the two companies only a very short time to formulate their plans – and then a few months to implement them.
Apple and Google have been asked to submit compliance plans in mid-October to a new South Korean law banning large app store operators from forcing software developers to use their payment systems, a regulatory official said on Wednesday.
The Korean Communications Commission will soon draft an enforcement decree that will follow the amendments to the state Telecommunications Act. Most of the new law came into force in mid-September.
The enforcement ordinance is expected to be drafted within six months or perhaps earlier, the official said.
Apple did not offer a comment at the time of writing.
Photo: Andy Makely / Unsplash
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