Google, Apple’s payment dominance in South Korea being questioned

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Google is still the tech giant but it is facing a number of challenges in some key markets. We know about the anti-trust ruling in Europe. The company has also faced or are still facing a number of lawsuits in the United States. In South Korea, Google may be barred from requiring software developers to use its payment system. It’s not only Google but Apple may also face the same fate. This move may mean both companies may no longer charge commissions on allowed in-app purchases.

This is a huge step from one of the biggest economies in the world. Known as the “Anti-Google law”, this Telecommunications Business Act goes after those app store operators such as Google and Apple. The commission structure has been pushed since last year.

Google has not really made a statement regarding this issue. Apple said it “will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases.”

That may be true in some levels. Apple also said, “user trust in App Store purchases will decrease as a result of this proposal — leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple.”

Global criticism against Apple and Google has been around since forever. They require developers to pay out up to 30% of their earnings on in-app purchases as commission.

U.S. Trade Representative’s spokesman Adam Hodge said, “We are engaging a range of stakeholders to gather facts as legislation is considered in Korea, recognizing the need to distinguish between discrimination against American companies and promoting competition.”

Korea Internet Corporations Association’s general manager Kwon Se-hwa noted, “If the new bill becomes the law, developers will have options to use other independent payment systems.”

According to Information Technology Industry Council’s vice president of policy for Asia Naomi Wilson, this bill would violate South Korea’s multilateral and bilateral trade commitments. She said, “If enacted, the bill would present challenges both for app developers and app stores seeking to do business in the Korean market.”

This bill could definitely bring a lot of changes in the horizon. Google and Apple earn millions from commission and that may change soon.

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