South Korea Passes Bill That Allows for Alternative App Store Payment System

iPhone App Store

South Korea has become the first country in the world to pass a bill that will force Google and Apple to allow third-party payment systems on their respective App Stores. Currently, App developers are forced to use payment systems from Google and Apple for their respective app stores.

Apple and Google get 15 to 30 percent of commission for every in-app transaction, so it is beneficial for them to force app developers to exclusively use their own payment system.

The bill passed in the South Korean parliament amends the country’s Telecommunications Business Act to prevent app store operators from forcing developers to use their payment system exclusively. It will also prevent app store operators from rejecting or deleting an app without any justifiable reason.

Companies that fail to comply with the new regulations could be fined as much as 3 percent of their revenue generated in South Korea by the Korea Communications Commission. The bill still needs to be signed into law by South Korean President Moon Jae-in, though this should not be an issue since the President’s party has strongly supported the bill.

Apple previously expressed concern at the bill saying it could lead to an increase in fraud and privacy violations. As for Google, its senior director of public policy Wilson White said the “the rushed process hasn’t allowed for enough analysis of the negative impact of this legislation on Korean consumers and app developers.” Both companies had lobbied heavily against the bill.

The EU and the US are also in the process of enacting a similar law. They could very well reference the law passed by South Korea and come out with similar guidelines that punish app store operators for forcing app developers to use their proprietary payments system.

[Via WSJ]