Google and Apple targeted by law in South Korea that ends monopoly on app payments

Legislation that could set a global precedent for the two tech giants that dominate the online application market in South Korea, the world’s twelfth largest economy and leader in new technologies.

South Korean lawmakers passed a law on Tuesday (August 31st) banning Apple and Google from forcing app developers to use their payment systems, effectively declaring their lucrative monopoly on the App Store and Play Store illegal. The bill passed 180 to none, making South Korea the first major economic power to pass such legislation.

The South Korean text – locally nicknamed “Anti-Google law” – will offer the possibility for users to choose a payment system when purchasing applications. “This law will certainly set a precedent for other countries, as well as for app publishers and content creators around the world.”said Kang Ki-hwan of the Korea Mobile Internet Business Association.

This South Korean initiative comes as Apple and Google are, across the planet, under fire from critics, accused in particular of levying a 30% commission on transactions made with their payment systems, which have become essential. In the United States, three senators in August proposed a law aimed at regulating the two dominant firms and forcing the Google-Apple duopoly to open up much more to competition. MEPs are also discussing such a law.

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” Abuse of power “

Later this year, Google plans to impose a global obligation on developers to use its payment system – with a 30% commission above a certain threshold – for in-app purchases. In South Korea, it also plans to charge commissions on all content payments from October, ending an exemption whereby commissions were only due for online games.

The announcement angered several South Korean artists and creators, web fiction writers and Webtoons (online comic) artists, who accuse Google of” abuse of power “ and campaigned for the new law.

Apple and Google believe the fees charged are justified, saying they allow safe shopping and allow app developers to reach users across the globe.

Ahead of the debate in the South Korean National Assembly, Apple said the law could put people who buy apps at risk of fraud, invade their privacy and make parental controls less effective. “We believe that user confidence in App Store purchases will decline after this proposal, which will reduce opportunities for Korea’s 482,000+ app makers who have earned more than $ 8.55 billion. won [6,2 milliards d’euros] to date with Apple ”, the American giant said in a statement.

Google Korea did not respond to Agence France-Presse’s requests for comment.

The two tech giants dominate the online application market in South Korea, the world’s twelfth largest economy and leader in new technology. The Google Play Store generated nearly 6 trillion won (US $ 4.3 billion) in revenue in 2019, or 63% of total app sales in the country, followed by the Apple App Store , which accounted for 24.4%, according to data from the Seoul Ministry of Science.

The World with AFP